Major Medical Expense Insurance

Basic Insurance Question FAQ
What is Major Medical?

Major medical policies are package policies that pay for a wide variety of expenses such as hospital room and board, surgery and other physician services, nursing care, drugs, and prosthetic devices. They provide high benefit limits, often as high as $1 million or $2 million or more in lifetime benefits which help to cover catastrophic coverage needs. Major med policies include deductibles and coinsurance.

Deductible - The amount the insured must pay before the insurer pays any benefits.

Co-insurance - A percentage of costs beyond the deductible that the insured pays up to a certain stated amount, after which amount the insurer pays 100% up to the policy limits.

Family Deductible - The maximum deductible paid for all family members on a family policy, usually two to three times the individual maximum. A family of five with a $500 individual co-insurance maximum would need to pay only $1,000 or $1,500 for all family members combined. Coverage is provided as a supplement to Basic Medical Expense plans or as a stand-alone Comprehensive Major Medical policy. The family deductible is a stop-loss feature for the insured.

Stop-Loss Feature - This provision (also known as an out-of-pocket limit) places a dollar limit on the insured's yearly out-of-pocket expenses. After the deductible and co-insurance payments reach the stop-loss amount, the insurer pays for covered expenses up to the policy's maximum benefit amount. The higher the stop-loss amount, the lower the premium.

Provisions Affecting Premium Cost to Insured

Becoming Licensed

Individuals considering becoming licensed to provide health insurance should look into one of our many insurance licensing courses.


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