Medical insurance is a boon to the common man who faces numerous heath risks, especially with the stresses and strains of modern life. Find below various types of short term medical insurance. Read more about critical illness medical insurance.
Short term medical insurance
Short term medical insurances as the name suggests, is a policy that covers medical expenses for a short term. This policy allows the applicant to cover the short term medical expenses for self and family. It is the most economical and trouble-free method of covering your sudden medical expenses. This plan also safeguards your eligibility for takeover benefits covered by a subsequent regular health insurance plan. Short term health insurance plans offers an individual and his/her family quality health care on a provisional basis.
Short term insurance plans provide insurance coverage from one month to three months or from one month to twelve months. This insurance is designed to offer protection against sudden illness and accidents. Short term medical insurance is non-renewable; the policy may be extended if a person undergoing treatment under this plan needs an extension (this period is termed as additional benefit period).
The applicant can pay either 50% or 80% (rate of payment) of the post-deductible medical expenses as the plan starts paying 100% of the covered costs. Insurance cover available at the current market condition is between US$ 1 million and US$ 2 million. Premium for this plan can be paid as a single payment or in installments. The applicant has the choice to pay premiums that will suit his/her budget, a choice of deductible common in the market is + US$ 250, US$ 500, US$ 1,000, and US$ 2,500.
Benefits of short term medical insurance
Step one: Deductible is paid by the applicant for each of the covered person.
Deductible choice - US$250, US$500, US$1,000, and US$2,500
Step two: After the deductible is paid up by the applicant, the insurance company pays either 50% or 80% of the subsequent US$5,000 of covered expenses. This depends on the rate of payment chosen by the applicant. The balance 50% or 20% of the expense incurred is paid by the applicant.
Rate of payment options - 50/50 to US$5,000 or 80/20 to US$5,000
Step three: The left over covered expenses incurred is paid up to 100% by the company; maximum amount payable is US$2 million per covered person.
Length of coverage - 30 - 180 or 365 days (varies from State to State)
Advantages of short term medical insurance
It is given to understand that an average adult has a minimum of six gaps in his/her health insurance coverage. These gaps occur due to various reasons:
- Fresh graduates until they find a suitable job and who can no longer be covered under their parent's policy
- For people beginning a new business
- For people who are shifting jobs and are waiting to the join the new employer
- For people who are awaiting medical benefits from the current employer
- For contractual, temporary, and seasonal employees
- For people who are shifting between permanent health plans
Eligibility of short term medical insurance
- Individuals, who are healthy, and who have completed fifteen days after birth
- Upper age limit is 64years and 11 months
- Children below 21 years (a few companies set 19 as the age limit), who are dependant on their parents. These children can claim through their parents' policy
- Children below 19 can be covered under the child-only plan, this plan offers cover for children aged between 2 and 18.
- Individuals should possess a social security number
- Pregnant women are not eligible for this medical insurance and their family too may not be covered until the woman delivers.
Benefits of shot term health insurance
- The person can choose his/her own doctor and hospital
- Insurance coverage right from day two
- Insurance coverage for both inpatient and outpatient services
- Insurance coverage includes medical prescription expenses
- Insurance coverage for x-ray and lab expenses
- Short term insurance premiums are very low when compared to permanent plans
- No medical examination required while applying for insurance cover
Shortfalls of short term medical insurance
- Prevailing health conditions
- Cosmetic and reconstructive surgery
- Normal pregnancy and child birth
- Preventive care
- Weight reduction programs
- Vision care
- Dental care
- These insurance plans also do not offer as many benefits as permanent health plans as the premium payable in this plan is much lower than the permanent plan
Temporary medical insurance
This insurance policy is designed to suit individuals who are temporarily without a medical insurance. People on temporary or seasonal jobs can choose this plan as employers do not provide health cover for such temporary and seasonal employees. People having gaps in between permanent health plans can also choose this type of medical insurance to cater to their interim needs. People shifting jobs and who are in training periods can opt for this insurance plan until their new employer provides them a health cover.
Temporary medical insurance offers health cover only for a short span of time and renewal depends on the applicant's general health at that time frame. These insurance policies can be used as a stop gap between permanent medical/health policies. Relying completely on temporary medical insurance policy is not advisable. While applying for temporary health insurance, ensure that you are adequately covered.
Critical illness insurance
Insuring against critical illness is the wisest way to tackle critical illness. The concept of critical illness insurance was coined in 1983 by Dr. Marius Barnard; terming it as dread disease insurance. Critical illness insurance is also popular as living assurance, crisis cash, and serious illness insurance.
Critical illness insurance is also known as critical illness cover; it is a type of insurance product that permits the insured to receive a lump sum from the insurer in case of any critical illness. The insured will receive the money only if the critical illness is listed in the list of critical diseases provided by the insurance provider. Money may be paid to the policy holder at regular intervals instead of a single lump sum. To derive the benefits of the policy, the policy holder should survive for at least 30 days from the onset of the illness.
In the United States, stroke is the primary cause for serious long term disability. Coronary incidents occur once every 29 seconds among the Americans. People who wish to financially secure themselves and their family from such critical illness can opt for critical illness insurance. Critical illness insurance will be paid to the policy holder if he/she is diagnosed with critical illness.
- Terminal illness
- Limb paralysis
- Alzheimer's disease
- Motor neuron disease
- HIV/AIDS contracted due to blood transfusion or during a surgery
- Parkinson's disease
Critical insurance cover
- Covers expenses that are not covered by the government or by group plans.
- Covers the complete expenses for treatment of the illness
- Pays mortgages and other loans of the person insured
- Spouses can take off to take care of their partners
- Support people with reduced income or lost income
- Find replacements to run existing business
- Provides recovery assistance
Premium depends on the age of the applicant, if the applicant is young, the premium is low and if the applicant is old the premium payable is high. Premium payable is also dependent on the number of critical illness conditions covered. The applicant should be above 18 years and below 65 years while applying for the policy.
Benefits of critical illness insurance
Critical illness insurance has the biggest benefit over other insurance plans; it supports the policy holder's personal expenses as well as covers the medical expenses.
- Disability insurance covers the income of the person but does not support the medical expenses.
- Life insurance pays up after the death of the policy holder or when the person is terminally sick, the policy holder cannot derive benefit from this.
- Long term care insurance is not flexible and has too many limitations.
- Personal savings or retirement savings will not be huge enough to cover both medical and living expenses.