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Previously you could purchase a replacement iPhone for $50 under the program. AppleCare+ must be purchased within 30 days of iPhone purchase and requires inspection of your iPhone and proof of purchase. You can no longer purchase AppleCare after an incident has occurred. For more information see the AppleCare+ Terms and Conditions and the frequently asked questions.
AppleCare builds on top of the standard warranty for an iPhone or iPod and extends support to two full years for both hardware repairs and phone support as long as you buy it within 60 days of buying your iPhone. There are two kinds of AppleCare, standard and AppleCare+.