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The term is generally used to describe a form of insurance that pays for medical expenses. It is sometimes used more broadly to include insurance covering disability or long-term nursing or custodial care needs. Covered groups or individuals pay premiums or taxes to help protect themselves from high or unexpected healthcare expenses.
Health insurance works by estimating the overall risk of healthcare expenses and developing a routine finance structure (such as a monthly premium or annual tax) that will ensure that money is available to pay for the healthcare benefits specified in the insurance agreement. i, e : California Life Insurance, California Home Insurance.
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