Short term major medical insurance
Medical insurance is available for long term as well as short term. When a person opts for long-term medical insurance the premium increases based on the number of years for which the coverage is required, and the type of medical expenses that are being covered.
Many people are unaware of how much medical cover they require, and it is also difficult to assess such requirements. Most people purchase long-term medical insurance from the funds that they can save rather than the coverage that is essential. In addition to this, the policy may exclude several types of medical expenses.
There are many types of medical expenses that can crop up suddenly. These include surgery costs, cost of prescription drugs, hospitalization charges etc. Long term medical policies that cover the entire set of possible medical expenses are invariably expensive. Cheaper options that exclude some of these expenses are also available. People opting for cheaper policies are therefore taking a chance that they will not have to incur such expenses.
Why take a short-term medical insurance?
Short-term medical insurance is a better option for people who are on short-term contracts. In other words people who cannot pay continuously, or are not continuously employed. Even those employees who are not drawing adequately may opt for short-term medical insurance till their earnings increase adequately. Effectively, short-term medical insurance policies are a stopgap arrangement before the person takes a full-fledged long-term medical insurance policy that covers most health problems.
Some people who cannot afford a comprehensive long-term health insurance policy opt to take a long-term medical insurance with some exclusion and take a short-term medical insurance covering those exclusions. In due course, when they can afford it, they buy long-term medical insurance that covers those exclusions as well.
Employers often purchase short-term medical insurance policies for their employees. Obvious reason is the cost. Moreover, employees insured by the employer may or may not continue to be in employment.
Why is short-term major medical insurance cheaper?
Short-term major medical insurance is cheaper because it provides cover for only a short-term. Unlike it, the long-term coverage lasts for several years.
Advantages of short-term major medical insurance:
a. It is cheaper;
b. A more comprehensive coverage can be obtained for same or lesser sum as long term medical insurance;
c. It is easier to estimate the likely medical expenses for various health problems. For example, how much would be hospitalization charges, how much would a heart or kidney surgery cost, and so on and so forth.
Disadvantages of short-term major medical insurance:
a. It is essentially a short-term coverage and needs to be renewed each year;
b. It is not essential that the insurance provider may be happy to cover the person each year. If the person's health has deteriorated or the person has claimed some amount during the year against the short-term major medical insurance policy, the health care insurance provider may refuse to provide insurance cover in the following year. This means the person may end up in a situation where he or she has neither the long term nor short-term medical insurance policy after such claims or health problems.
In any event, the medical insurance purchaser should read the fine print because even short-term major medical insurance policies offered by different health insurance companies may be covering different ratios of medical expenses. Based on personal health, and likely problems such as those that are hereditary, the insurance purchaser must opt for a policy that is ideally suited to him or her instead of buying any medical insurance policy as part of some group.
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