What Is Major Medical Insurance?
Nearly everyone knows about health insurance, but its cousin, major medical insurance, is less well known. After all, most people do not think that a major medical emergency will happen to them. Additionally, it is assumed that the health insurance will cover any sort of massive surgery or procedure that is necessary. This is true to a point, but major medical insurance adds an extra layer of protection.
Major medical insurance is insurance designed to cover large and expensive medical procedures. It is designed to cover:
- Unexpected health concerns
- Long hospital stays.
The deductible is often higher than regular insurance, and premiums are slightly higher. This is because one major medical incident can set the insurance company back tens, or even hundreds, of thousands of dollars, sometimes even more.
On the positive side, the limit of services received through major medical insurance is much higher than health insurance, making it possible to receive somewhat affordable care in a medical facility long after the health insurance company would have sent you home.
Most health insurance plans have a lifetime limit of one million dollars. This means that your visits and procedures, beyond regular check ups and physicals, are capped at one million dollars over your entire life. If something like cancer or a devastating accident happens, you can easily run into your cap. Then you have to find a way to finish paying for your medical needs.
Additionally, some health insurance companies and plans have an incident cap. This means that even though you may not run up against the life time cap, you can still have a limit on how much the insurance company for each procedure. If the cap is $30,000 per incident, you still have to come up with another $20,000 to $50,000 in order to pay for heart surgery. With major medical insurance, this is not as much of a problem. Even though you've paid higher premiums for years, most of the time, if a major medical emergency or need occurs, you still will not have paid in to the company what the major medical insurance company pays out on you.
The whole reason this system works is that the chances of you actually needing the insurance are pretty slim. Most of the time major medical insurance is bought on top of regular health insurance. This is because many major medical plans will only kick in after the regular health insurance can do no more, for instance, after you reach your cap, or if the insurance does not cover a necessary procedure. It is very possible that you can go through life never actually using your major medical insurance. It is just like any other insurance in that respect. It is there in case you need it, but you might not ever use it.
When deciding whether or not major medical insurance is right for you, you need to decide how likely you are to really need it. But, if you can afford major medical insurance, there is nothing wrong with buying it, just to be safe.