Political and Legal information on the Health Care Debate. View our freshly updated You Tube videos about health care on the right hand side of this blog. Includes ideas from politicians concerning Universal Health Care. Information on all things health insurance related from Medicare to short term health insurance.

Sunday, April 6, 2008

Why is Temporary Medical Insurance less expensive?

Temporary Medical Insurance is just the same as traditional major medical insurance, but it costs much less. The reason that it costs less is the liability of the company to pay claims is lower because of the shorter duration. Every individual and family health insurance plan is a month to month type of plan. You don't have to purchase a contract like you would with a cell phone. If you pay the monthly premium, you have the insurance. If you don't pay, then you don't have the insurance.

People often don't understand the difference between short term and full term health insurance plans. The difference is that the insurance company has a short term liability of coverage. For example if you got a short term insurance plan for six months and paid month to month, you would be covered until the end of the six months. At the end of the six months, you would need to re-apply if you wanted to continue the coverage. When you apply you must answer health questions based on your medical history. If you can not answer the health questions to qualify for the medical insurance then the insurance company will turn down the new program. So if you have a claim or a medical procedure during the time you have the temporary insurance plan in place, that claim would be paid, but it would be difficult qualifying at the end of the term for a new policy.

By contrast, a full term medical insurance plan would cover an individual and family for as long as they needed and as long as they paid their premiums. If someone on a full term plan had a medical procedure covered by the insurance plan, that claim would be paid. As long as the individual pays their premium, that policy will remain in place and pay claims. The insurance company may have to pay claims on a person until they turn 65 and go on Medicare.

The term Temporary Health Insurance only applies to the insurance company. The insurance company has a temporary liability on a client's medical bills until an individual has to re-apply. For this reason, temporary health plans are mainly for people who know that they will have coverage within a short time period. It is never good to go without health insurance, but full term insurance can be cost prohibitive. Generally if people are between jobs, or starting a new job, or graduating and in the process of interviewing, or getting ready to go on Medicare, short term health insurance can provide the protection that an individual needs at a fraction of the cost.

I hope this information helps you to make an informed decision about which plan would be good for your situation. As always, contact a medical insurance agent if you have questions and they'll be happy to go over the options available to you. You can review, get quotes, and apply online at websites like this one Temporary Medical Insurance

No comments: