Is a 2 million dollar maximum enough?
By Jorge Hiram Garcia, Your Insurance Advisor | April 9, 2010
In a previous article, we looked at the 5 things your major medical health insurance plan should have in order to ensure that you are protected. One of those 5 things was the maximum amount of coverage that the insurance company will pay in case your should actually need to use your coverage.
There are two type of maximums that should be considered. One is the maximum per claim. The second one is the maximum per lifetime coverage. It is easy to think that you will never need that much coverage, and for the great majority of us, we won’t. Ever. But, for those that do, and one never knows which one of us it will be, and when it will happen. Well, that’s why we buy insurance.
The per-claim maximum is the most the insurance company will pay for any single claim due to illness or injury. The ways this works is too put it this way:
Year One – you suffer the consequences of a catastrophic accident and it costs one million to put you back together. Your insurance company will pay up to one million under the terms of the policy
Year Two – you suffer from the consequences of a major illness like cancer, and the costs to treat your illness are one million dollars. Again, the insurance company will pay up to one million dollars for this claim.
In case of lifetime limits, however, each claim will reduce the amount of coverage available for later incidents. In the above example, if your lifetime limit is one million dollars, then your cancer treatment would not have been covered. As recommended in the previous article entitled 5 Must-Haves In Your Health Insurance Plan look for policies that offer 3 to 5 million dollars in lifetime coverage. I know it seems excessive, but it’s better to have the coverage and not need it, instead of needing it and not having it. If your child comes down with leukemia, or some similar disease, guess what? That limit is not going to seem all that high.
Most families get the health insurance coverage through their employers. If your do, then look at the lifetime maximum limit in your employer provided policy and make sure it is a sufficient amount. Most policies provided by employers come with a $500,000 lifetime limit. This amount may not be enough. What do you do in this particular case? The answer is look to buy an Excess Major Medical Policy or Supplemental Major Medical Health Insurance Policy which will work with your existing employer provided policy to plug any gaps in coverage you may currently have, and will step in and supplement your existing coverage should it become necessary.
Have you taken a look at your existing major medical health insurance policy? Do you know what’s covered by your plan? Do you know how well it will protect you in case of a catastrophic illness, or serious injury caused by an accident? You should. If you have had experience using your health insurance plan, let us know how it worked for you. Share your experience with our readers, and let us know what you learned from the experience.
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