When you are reviewing the contract of a health insurance policy, it can be a daunting task. The process involves more than simply shopping around for the best insurer and price. There are very important considerations that need to be evaluated to fully grasp what it is you get when you sign the dotted line.

There are many variables to consider including the exclusions, limitations, terms, provisions, and a host of other items such as procedures that may or may not be covered at all. Also, get a clear understanding of the proposal being outlined for your consideration. Insurance contracts are usually contracts of adhesion, meaning you adhere to their principals once you except their terms. So be patient and take your time.

The definition of terms helps de-mystify some of the legalese used throughout the contract. This section should define what a “covered member” is as well as what your insurance company considers “medically necessary.” Several other definitions may or may not be included in this part of the terms and conditions, but are still helpful to know. For example, co-insurance is simply how you and your insurance company will split the cost of a given procedure. A co-pay refers to the payment required when you visit a doctor or buy prescriptions. Many online resources list these and other insurance-related terms as well.

Most of the benefits outlines in these policies are usually not written in laymen terms so it would help to have a licensed insurance agent or attorney guide you through the nuts and bolts of some of the provisions and definitions in the contractual language. Precisely knowing what you will pay in advance before you sing the dotted line can eliminate many of the headaches or financial burdens imposed when you seek medical care or treatment under false pretenses.

You should also take a close look at the limitations and exclusions section. While the schedule of benefits lists all covered procedures, the limitations and exclusions portion of the terms and conditions covers the procedures and services that are excluded from coverage. If you have a pre-existing medical condition and want to know if your policy will cover the cost of treatment, read this section carefully.

This part of the contract also covers coordination of benefits policies if applicable. Health insurance contracts are often long and tedious. Although these sections are important, they are by no means the only things included in a health insurance contract. Read carefully and with caution!

Sean L Johnson is a journalist for Health Insurance Buyer a referral service that connects consumers to the insurance carriers that can best fit their wants or special needs. Click on link for your free insurance policy evaluation

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