Studying in the United States, you’ll be exposed to a variety of insurance options, and medical insurance is mandatory for all international students. Living in the United States, medical insurance is a crucial part of everyone’s life. In addition, life insurance and pet insurance also provide a strong financial safeguard against potential risks.
Health Insurance
First, US health insurance does not mandate dental and vision coverage for adults, so when purchasing health insurance, you need to understand whether your chosen insurance product includes these benefits. Many health insurance plans require vision and dental coverage to be purchased separately.
The most common types of health insurance in the United States are:
– Employer Sponsored Health Plan
– Federally subsidized health insurance plans (HealthCare.gov)
– Student Health Insurance –
Temporary Health Insurance
– Short-term Health Insurance is used during job changes and usually has a short waiting period
– Indemnity Plans have low premiums and are generally used for major issues such as surgery and hospitalization
Medical insurance claims model
The healthcare systems in the United States and China are very different. Understanding the medical insurance claims process and specific procedures can help you make claims more efficiently. It’s important to note that whether you’re seeing a doctor in or out of network, you’ll need to bring your insurance card information.
For doctors on campus and within the network, medical bills are generally sent directly to the insurance company. This process is called direct billing. There is no need to advance payment, and the settlement method is relatively convenient.
For out-of-network doctors, you’ll need to fill out a separate claim form each time you see one. However, if you see multiple doctors for the same condition, you only need to fill out the form once. You must submit the claim form and other materials to your insurance company within 90 days of each visit. The claim materials should be an itemized bill.
Valid medical insurance billing details include:
– Provider’s address
– Tax ID
– Diagnosis Code
– CPT Code
– Proof of Payment
Medical insurance claims can be submitted via email, mail, or fax. Generally, it takes 10 to 20 business days for insurance companies to process claims.
There are several stages in the processing of medical insurance claims:
– Received materials and application (Receive)
– Processing (Pending)
– Processing completed but EOB still in process (Complete + EOB Pending)
– Processing completed (Complete)
Additional information: EBO stands for “Explanation of Benefits” . It is an insurance claim explanation that lists the medical expenses received, expense details, and the content and explanation of the claim or denial.
Pet Insurance
Many people choose to keep pets as companions. Pet insurance can be very useful when pets suffer trauma, ingestion, or other emergencies. The sooner you buy pet insurance, the better, as pet insurance generally has a two-week waiting period. Bills incurred before or during the waiting period are not reimbursed and are considered pre-existing conditions, which can be detrimental to subsequent claims and, in some cases, can lead to insurance companies denying claims.
There are several types of pet insurance:
– Wellness: This type of pet insurance includes coverage for waived outpatient visits, routine vaccinations, and comprehensive physicals. This type of wellness insurance doesn’t cover most expenses, as pets still have to bear the medical costs themselves if they become ill; this policy only provides a small reduction.
– Medical/Emergency: This type of pet insurance provides some coverage for emergencies, with insurance companies generally covering a high percentage of medical expenses, ranging from 60% to 90%.
Some pet insurance companies also provide comprehensive health and accident insurance, which can more comprehensively protect the pet’s life safety and the owner’s wallet.
US Life Insurance
In the United States, many families purchase life insurance to provide financial security for the insured’s family or designated beneficiaries. For families like breadwinners, parents with children, those with special health or intellectual disabilities, families with mortgages, those with large inheritances seeking to protect their tax bills, and those seeking to leave a balance after death, life insurance can provide a degree of security for the insured’s family.
Life insurance in the United States is a continuous process. Even if your employer offers life insurance, the coverage is usually low, typically only one or two times the insured’s salary. Furthermore, if you change jobs, you’ll need to purchase new life insurance. Life insurance premiums also increase with age.
Types of life insurance
There are six common types of life insurance in the United States, which are introduced below.
1. Life Insurance – Term Life Insurance:
Term life insurance is life insurance provided at a fixed rate for a fixed period of time, such as 10 or 20 years. If the policy expires, the premium will be recalculated, and the policyholder will need to reassess factors such as the cost of the policy and the amount of compensation.
Advantages: Lowest premiums
. Disadvantages: Limited functionality, limited timeliness, and increasing renewal costs and requirements.
2. Life Insurance – Whole Life:
Whole life insurance is also known as savings insurance or dividend-paying life insurance. A portion of the premium paid by the policyholder covers the cost of insurance, with the remainder converted into cash value. The insurance company promises guaranteed returns, i.e., regular dividends. For example, the cash value earns a 4% annual interest rate.
Advantages: Lifetime protection and claims settlement, guaranteed cash value rebates and guaranteed returns, fixed premiums, and tax incentives.
Disadvantages: Expensive premiums (according to data from the U.S. Life Insurance Guide website in Q4 2020, the average premium per policy is $3,571), mandatory contributions, and low returns.
3. Life Insurance – Universal Life:
Universal life insurance is a type of whole life insurance. Unlike whole life insurance, the cash value return is linked to stocks, bonds, or financial indices, providing a minimum guaranteed rate of return.
Advantages: Lifetime protection and claims settlement, cash value return rate, flexible premiums, lower cost than whole life insurance, and tax benefits.
Disadvantages: Unstable returns, and the complexity that comes with flexibility.
4. Life Insurance – Guaranteed Universal Life (GUL) Guaranteed
Universal Life provides life insurance with lifetime claims protection at a relatively low premium. For example, a GUL with a coverage of $1 million would cost the policyholder 20,000 yuan annually. Regardless of market conditions or when the policyholder passes away, the policyholder’s beneficiary will receive a death benefit of $1 million.
Advantages: Lifetime protection and claims, low-cost insurance, and favorable tax policies .
Disadvantages: Limited to a guarantee function and limited cash value .
5. Life Insurance – Variable Universal Life (VUL) Variable
Universal Life is a derivative of universal life insurance. It’s a type of life insurance where the policyholder can use their cash value to select different investments, thereby generating a return on their investment. Investments can be increased during good times, but there’s no guaranteed loss. Brokers require strong investment skills, and policyholders need a strong risk tolerance.
Advantages: Lifelong coverage and claims settlement, flexibility, direct market linkage, uncapped returns, and tax incentives
. Disadvantages: Expensive, relatively complex, and requires professional management. Premiums may increase, and accounts are vulnerable to losses.
6. Life Insurance – Indexed Universal Life (IUL)
Indexed universal life insurance offers the basic features and flexibility of universal life insurance, with some protection for the cash value portion. As the name suggests, indexed universal life insurance is linked to several major market indices, such as the US S&P 500, Hong Kong Hang Seng Index, and Germany’s DAX 30. If the market declines, the policyholder’s cash value is guaranteed to remain stable. If the market rises, the insurance company provides an annual rate of return cap.
Advantages: Lifetime protection and claims settlement, principal preservation, minimum return, flexible premiums, and tax incentives.
Disadvantages: Unstable rate of return, rate of return cap
Insurance Policy Glossary
As a student at an American university, almost every university will provide health insurance to ensure the health and safety of every student in the school. When students have other insurance certificates, some American universities will also agree to students to replace the medical insurance provided by the university.
However, the US health insurance has an intricate management system. Below we have compiled some commonly used health insurance English terms:
– Premium: The monthly prepaid price of the insurance
– In-network doctors: If you cooperate with the insurance company, the insurance company can reimburse the percentage of the corresponding insurance plan
– Out-of-network doctors: If you do not cooperate with the insurance company, you cannot apply for reimbursement from the insurance company
– Waiting Period: Bills before and during the waiting period will not be reimbursed
– Deductible: The cost you pay out of pocket before the insurance company pays. The lower the amount, the better for the insured
– Co-payment: For certain medical items, the fixed amount you need to pay each time you see a doctor. The lower the co-payment, the better for the insured; similar to the registration fee
– Coinsurance: The amount you need to pay after the deductible is full – the amount after deducting the relative proportion of the insurance limit
– Out-of-pocket Maximum: The maximum amount you pay out of pocket during the insurance period. Including co-payment, deductible and coinsurance. After the maximum deductible is reached, the insurance will pay 100% of the compensation, so the lower the maximum deductible, the better.
– Maximum Benefit: It may be set on a per visit, per year or lifetime basis. This represents the maximum amount the insurance company will pay. The higher the amount, the better for the policyholder. No limit is the best situation.
– Coverage: The items and expenses that the insurance company will cover.
– Pre-existing conditions and conditions: Some plans will refuse to cover certain pre-existing physical health problems (such as certain genetic diseases, major illnesses, pregnancy, etc.).
– Waiting Period: Some plans have a waiting period before the policy takes effect. During the waiting period, the insurance will not pay any benefits. The waiting period varies from insurance company to insurance company.
– Prescription (RX): Some insurance companies have a list of prescription drugs that they reimburse. You can check whether the prescribed drugs are covered by the insurance.
There are so many types of health insurance, life insurance and pet insurance. The best choice is the one that suits you best.
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