What is the primary purpose of health insurance?

The primary purpose of health insurance is to cover medical expenses incurred due to illness or injury. This concept is foundational to understanding how health insurance operates. When an individual faces a health crisis, such as requiring surgery or ongoing treatment for a chronic condition, the cost of care can be significant. Health insurance serves as a financial mechanism that helps individuals manage these costs, thereby reducing the financial burden associated with healthcare services.

Health insurance typically involves a policyholder paying premiums, which in turn provides them access to a network of healthcare providers and facilities. When medical services are needed, the insurance covers a portion of the costs based on the terms of the policy, ensuring that individuals receive necessary care without facing overwhelming debt.

In contrast, the other options focus on areas outside the scope of health insurance. Financial assistance for life insurance policies pertains to a different type of insurance altogether, primarily offering a death benefit rather than covering medical costs. Accumulating savings for educational expenses and providing coverage for property damage are also outside the realm of health insurance, as they relate to savings accounts and property insurance, respectively. These distinctions clarify why the coverage of medical expenses due to illness or injury is indeed the core objective of health insurance.