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Cut Expenses - 8 Questions to Ask To Cut Expenses When Buying Catastrophic Health Insurance

Many Americans live day to day without health insurance. And while the cost of routine medical care won't ruin most of us financially, the expense of a catastrophic illness certainly could.

If you're looking for low insurance premiums but want coverage that picks up the slack when it comes to major medical concerns, a catastrophic health insurance policy might be just what you need.

Also known as "high deductible" or "major medical" insurance, catastrophic health insurance is designed to protect you from ruinous medical costs while encouraging you to shop wisely for routine health care.

Here's how it works:

• You choose a higher-than-normal deductible, usually between $250 and $2,000, depending on your insurer. (The deductible is what you pay out of pocket before your insurer starts paying.)
• You agree to cover your own medical costs up to that deductible amount.
• Once you spend up to your deductible, your insurance company covers 100 percent of your medical costs (with certain restrictions).

Since you agree to cover the expense of your own routine health care costs, like doctor visits, medications and such, a catastrophic health insurance plan can drop your premiums significantly.

What is covered under a catastrophic health insurance policy?

Depending on the policy you choose, medical procedures that can help diagnose, avoid or eliminate catastrophic illness are generally covered. This includes medical processes such as x-rays, hospital visits, lab tests, surgery and intensive-care stays, to name just a few.

What is not covered?

Usually, more routine events such as doctor visits, medications, prenatal care and some preexisting conditions are excluded from catastrophic health insurance plans.

Questions to ask when shopping for coverage

1. How much is the deductible?
2. How much are the premiums (payable monthly, quarterly or yearly)?
3. Are these calculations in line with my/my family's budget?
4. How much coverage do I/we really need?
5. Can I/we afford to cover my/our own doctors' visits and prescriptions?
6. Do I/we have any preexisting conditions requiring frequent medical visits or treatments?
7. Am I/are we a generally healthy individual/family?
8. What is the lifetime annual benefit (the yearly limit your insurer will cover)? Will this meet my/our needs?

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With over 20 years of experience as a personal financial educator and counselor, Vernon Williams has developed in depth knowledge of what it takes to achieve financial success. Today, he is a sought after trainer and speaker by organizations from both the public and private sector. He is the author of 425 Ways to Stretch Your $$$$ and 3 Rules that Guarantee Financial Success. Visit him at http://www.howtocutexpenses.com

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