What is the main purpose of health insurance policies?

The main purpose of health insurance policies is to reimburse policyholders for medical expenses incurred due to illness or injury. Health insurance is designed to alleviate the financial burden of medical costs, which can be substantial, by covering a portion or all of these expenses. This enables individuals to seek medical care without the overwhelming concern of how to pay for it. Policies typically cover various services, including hospital stays, doctor visits, surgeries, and medications, depending on the specific terms of the policy.

While other options, such as providing tax benefits or funding retirement plans, can be associated with different types of insurance or financial products, they do not accurately reflect the primary function of health insurance. Life coverage, mentioned in another option, is specifically related to life insurance, which serves to provide financial support to beneficiaries upon the insured's death, rather than addressing healthcare costs during a policyholder's lifetime.