• Short Term Health Insurance Blog

  • Monday, November 20, 2017

  • Accidents, Benefits, Co-Insurance, Deductibles: ABCDs of Temporary Insurance

    Filed Under: Blogging

When purchasing a short term health insurance plan, some of the terms you will come across are benefit maximums, co-insurance, and deductibles. As you might have rightly guessed, these terms specify your portion of the payment, if the need arises.

Let's see if we can unravel these terms in a simple manner. The benefit maximum is the maximum payable amount for each condition. For fixed benefit plans, the benefit maximum is specified for most conditions separately. For example, a surgery may carry a maximum limit of $4,000, and a day's stay in the hospital, $1,500. comprehensive benefit plans usually have maximum benefits mentioned only for certain medical problems.

The deductible is the amount that you opt to pay before any insurance kicks in. This is actually very advantageous to the insured, as tweaking the deductible can increase or decrease the amount payable. If you think you can afford up to $1,000 for a medical illness, choosing that as your deductible will reduce the premium payable.

The co-insurance is the percentage of the amount that the plan will pay, after the deductible. A co-pay, on the other hand, is a set amount that the insured agrees to pay--say $20 on every doctor visit. The most common co-insurance is an 80/20 arrangement, where the insurance plan pays 80% of the costs, and the insured, 20%. In most temporary plans, the insurance company pays 100% of the covered costs that exceed a certain set maximum. For example, after the first $10,000 in expenses, the plan may pay 100% of covered expenses.

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