Function

• Health insurance and dental insurance work in essentially the same way as other types of insurance. The insurance policy holder pays a monthly fee, or premium, for the guarantee that the insurance company will provide certain benefits outlined in a contract. If the insured person remains healthy, the insurance company will make money by collecting premiums. If the individual happens to get sick, the insurance company will contribute money toward the problem according to the health insurance contract. In many cases, the insurance company will cover most or all costs that exceed a certain minimum out-of-pocket cost, or deductible.
  
  

Benefits

• Health and dental insurance are beneficial because they can help people pay for expenses that might pose an extreme financial burden without insurance. For instance, if you went in for a routine checkup and the doctor discovered that you have cancer, treatments could cost tens of thousands of dollars a year, but your insurance might cover the majority of the cost. Insurance increases the amount of care that individuals are able to receive.
  
  

Features

• Health and dental insurance plans vary in terms of what they cover and to what extent certain expenses are covered by insurance. Most insurance plans carry a deductible on certain types of care--a flat cost that must be paid before the insurance company will cover costs. The larger the deductible, the lower the monthly premium is likely to be.
  
  

Misconceptions

• Carrying health insurance and dental insurance does not necessarily mean that all health and dental expenses will be made affordable. Some insurance plans require "coinsurance," which means that you split the cost of care with the insurance company. For instance, you might have a plan where the insurance company pays 80 percent of costs beyond your deducible and you must pay 20 percent. While 20 percent is much better than the 100 percent you would pay without insurance, very expensive procedures such as surgeries and cancer treatments can easily amount to thousands of dollars even if you only pay 20 percent.
  
  

Considerations

• Health and dental insurance plans are often offered as a work benefit by employers. If you have access to a group insurance plan offered by your employer, you have the right to join the plan even if you have preexisting medical conditions.