Health insurance is a contract where you pay monthly premiums to an insurance company, and in return, they cover a portion or all of your medical expenses. The system pools money from all policyholders to pay for healthcare costs when members need medical care. Your plan includes a deductible (what you pay before coverage starts), copayments (fixed amounts per service), and an out-of-pocket maximum (the most you'll pay annually). Health insurance protects you from catastrophic medical costs while providing access to preventive care and medical services at negotiated rates, helping prevent financial hardship from unexpected illness or injury.