Catastrophic health insurance plans offer a unique and effective solution to rising health insurance costs. Here is how a catastrophic health insurance plan can help you or your family save money and stay protected.

Affordable Premiums

Because most catastrophic health insurance plans offer coverage with a high deductible and very few "bells and whistles", the price for these plans is very affordable. In fact, many individuals save hundreds, if not thousands of dollars, per year.

The idea is, that the insurance company covers the big stuff, and you are responsible for the everyday expenses. This is advantageous because if you don't utilize your health plan throughout the year, you keep the money you would have otherwise spent on comprehensive health coverage, not your insurance company.

Excellent Major Medical Coverage

Although these plans don't cover everyday expenses, some do cover preventive care and/or minor accidents before the deductible. Some also allow you to add a supplemental cancer benefit.

There are many plans that cover 70% or 80% of your medical expenses after you have met the deductible. However, you should be able to find a plan that covers 100% once the deductible has been met. Because these plans were designed to cover major medical expenses, it's common that they cover between $1,000,000 and $25,000,000 in expenses over a persons lifetime.

Tax Advantages (an added bonus)

If you purchase a "qualified high deductible health plan" you are eligible to open a health savings account (HSA.) An HSA is a checking account that allows you to deposit money pre-tax. Once you have a balance, you can use the money in your HSA to pay for medical, dental, vision, and other expenses you have throughout the year. Most banks or credit unions will provide you with a debit card to simplify payments and record-keeping. There are many other expenses you can pay for, pre-tax, out of your health savings account.

Best of all, the money comes out of the account tax free. It's the only financial account available that's not taxed on the way in, or the way out. It's a huge financial bonus on top of having a low health insurance premium, especially if you are in a medium or high tax bracket.

The Bottom Line

A catastrophic health insurance plan is a great way to save money on your health premiums and take advantage of tax savings for the medical expenses you incur during the year. Take advantage of this unique solution and contact an agent in your area for a quote.



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