Life insurance company central

When deciding on a catastrophic health insurance deductible, it's important to take into consideration a number of things.

What is the most money you could come up with in the event of a major medical event?

This will help you determine what deductible you or your family can safely handle. The idea is to take on as much risk as you can, to lower your monthly premium, but not get yourself in trouble by choosing a deductible that's too high.

Does the deductible you are considering apply to the whole family, or is it per person?

If you choose a deductible of $5,000, that could mean two things. Either it's $5,000 per person per year, or it's $5,000 for the whole family. It's important to know how your deductible applies before applying for a catastrophic health insurance plan.

What is the annual maximum and what is the lifetime maximum?

The whole idea behind a catastrophic health insurance plan is to take on the everyday expenses yourself, but make sure that you are covered for major medical events. If a plan is offering a $1,000,000 lifetime maximum benefit and a $250,000 annual maximum benefit, you may want to consider looking at a different plan. It's quite possible to go over $250,000 in one year and $1,000,000 in a lifetime. There are plan that offer $2,000,000 all the way up to $25,000,000 lifetime maximums.

Is the insurance company giving you a fair price for the risk you are taking on?

The higher the deductible, the lower the price. A good method for deciding if you are looking at a fair price is to take subtract the medical deductible you have now from the medical deductible you are considering. Let's say right now, you have a $500 deductible and you are considering a $5,000 deductible catastrophic health plan. The difference is $4,500. If you are paying $600 for your current plan and the new plan costs $150 per month, you are saving $450 per month in premiums, or $5,400 per year. A good rule of thumb is, if you can save approximately the difference in deductible ($4,500 in this case), in one year, then it's probably a good deal.

The bottom line

Make sure you do your research before moving from your current plan to a catastrophic health insurance plan. Be sure the price/benefit ratio is worth the move. Also, be sure that you can handle a major medical expense in the event of an emergency, or unexpected medical event. If you do your research, moving to a catastrophic health insurance plan can be very rewarding!

Jared J. Balis invites you to visit his Catastrophic Health Insurance website to get a free catastrophic health insurance quote and learn more about how catastrophic health insurance plans can help protect you or your family and improve your financial situation.