An individual health insurance policy is important to keep you and your family healthy and on budget. With the rising cost of healthcare and increasing illnesses, being insured is of utmost importance. Individual health insurance is popular as you can lock in a good rate, and it is portable,  meaning it is not dependent on being part of a group or group health insurance.

There are many types of individual health insurance to choose from and this can get pretty confusing, when it comes to understanding the various options. Here are a few of the more popular policies.

Types of Individual Health Insurance
1. Major Medical
As the name states, a major medical insurance policy is a policy that covers only major medical expenses. This type of policy only pays for certain major medical procedures. It does not cover routine or preventive care. Generally, you will get benefits for hospital stays and surgeries. You will generally have a less expensive premium than with traditional individual insurance as this policy limits the expenses it pays.

2. Preferred Provider Organization (PPO)
A preferred provider organization is a discount form of health insurance.  The PPO has a network of complete health care providers ranging from hospitals to doctors.  If a person has taken the PPO policy and had to undergo treatment, as long as the patient will get medical attention in one of the hospitals or doctors within the network, then the treatment is covered by the PPO.  But if the patient decides to take it elsewhere, he would get a reduced rate.

People are opting for this kind of insurance since it means less money and less paperwork.  But some people do not want to be limited by network physicians since they may want to choose their own doctor or sometimes they have their own doctor who is not part of the network.

Another disadvantage of this kind of health insurance is that preventive care services sometimes are not covered by the PPO.  There are even PPOs that state that selecting or choosing a health care provider outside the network would cost you the entire cost of the medical attention.

3. Health Maintenance Organizations (HMO)
Health maintenance organizations are the least expensive but the least flexible type of health plan.  They also tend to be geared more toward members of group plans than individuals.  HMO requires that you only see its doctors, before you can get a specialist, you would need to get a referral from the primary care physician.

In a nutshell, to get free medical attention you need to see HMO approved physicians.  If you choose not to, then you will pay for the medical bill yourself.  HMOs are best known for covering preventive care services and health improvement programs.  Each patient has a Primary Care Physician, who is responsible for providing preventive and coordinating care for the patient if additional specialists or hospitalization is needed.
HMOs are considered managed health care.

4. Point of Service (POS)
A POS is sometimes considered a combination of a PPO and an HMO.

With POS they may operate like a PPO, but they have a gatekeeper or a Primary Care Physician.  The patient chooses a primary physician from the plans network of doctors.  This doctor authorizes a referral to a specialist that can be from inside or outside the network.  If a patient sees a specialist without a referral, the insurance company may choose not to pay for the services.

If the primary physician refers you to a doctor who is out of the network, the plan should pick up most of the cost.  But if you did not get the referral from the primary physician and refer yourself, then it would mean more paperwork and sometimes a smaller reimbursement.

POS plans sometimes cover preventive care services and may even offer health improvement programs.  They sometimes cover workshops about quitting smoking and provide discounts in health clubs.

5. High Deductible Health Insurance
Your monthly premium is lower with high deductible health insurance, but your out-of-pocket costs is higher. You will be expected to pay on your own for all of your expenses until you reach the deductible limit. Only then, do your insurance benefits kick in.