Why You Need Excess Major Medical Insurance

Excess Major Medical insurance is not well known and is certainly different than your typical run-of-the-mill major medical – but boy will you like it when you need it!  And, it is relatively inexpensive at about one quarter to one fifth the cost of major medical insurance.

The American Bar Endowment commissioned a white paper written by AIG subsidiary American General Insurance Group, which covers the basics of Excess Major Medical insurance coverage.  Take a moment to review – it will be five minutes well spent.

Excess Major Medical works similar to your Umbrella Liability coverage you likely have as a homeowner.  After you exceed the limits of your primary major medical policy, your Excess Major Medical policy begins coverage.  Depending on the Excess Major Medical plan you purchase, you can go out of network for any treatments you may need and be fully covered for usual and customary charges.  Maximums on an Excess Major Medical plan typically cover $1o million of expenses over and above the $2 million max on your regular major medical policy.

What does this mean?  You will have no worries about charges for complicated and expensive treatments – you will be covered for the vast majority of charges up to $10 million dollars, in most cases.  And the charges will add up.  A gentleman that I am close to remarked to me after completing a few forms as we sat together, “well, I just completed the claim forms for one month’s worth of prescriptions.  $93,000!”  Cancer treatments, among others, are very costly – and getting more so every day.

With 1 of every 2 men to be diagnosed with cancer during their lifetime and 1 of every 3 women, Excess Major Medical coverage will keep you and your family financially secure when you need to expend all of your resources on your health.  Your major medical policy sounds good with a $2 million lifetime maximum, but in reality, you will blow through that amount in a matter of months in the event of serious illness.

Excess Major Medical is an obscure type of insurance.  Chances are that you’ll need it.  Learn about it.  Ask your broker.

Comments

  1. Hi, good post. I have been wondering about this issue,so thanks for sharing. I’ll certainly be subscribing to your site.

  2. Why Do we have to pay for insurance? I think, that government and insurance companies make money on people and fool them. And how about people, who can't pay for insurance (they don't have enough money for it)?

    • swdowling says:

      Metatrader, that is the question. Why do we have to pay for insurance? I believe it is a choice. A choice that everyone needs to make and on their own terms and particular to their own situation.

      We shouldn't have to pay for insurance, but in certain instances the government, federal/state/local require it. If you hold a mortgage on property, your contract to hold such property likely requires insurance. If you own a car, the local/state government requires you to have auto insurance. Now, President Obama and the Democrat led Congress are requiring you to have health insurance.

      You can choose to avoid two of these, but you can't avoid the third. You can choose to not own an automobile and you can choose not to have a mortgage. Thus, you need no insurance. But, you just can't choose to not live as an American in America (well you can, but you wouldn't be here) – so you are now being required to purchase health insurance.

      Further, if you read my post on Medicarehttp://www.insuranceinthelight.com/?p=86 you will see that prior to 1966 when Medicare started, patients paid doctors out of their own pocket. Insurance reimbursed patients after the doctor was paid. There was no such thing as Major Medical insurance.

      Next time you see the doctor, don't sign the papers they require. Tell the doctor that you will pay him from your own pocket. See my post on changing your health care purchasing behaviorhttp://www.insuranceinthelight.com/?p=73. Once patients refuse assignment en masse, providers will need to compete and costs will drop for insurance and care.

      As for your comment about insurers making money and fooling them, I can't say that I agree. Insurance is a product to transfer the risk of financial burden due to catastrophic loss. It is a product just like any other that you purchase. The maker of the product is entitled to make a profit. The government aside, you are free to choose the product from whomever you wish at whatever price you are willing to pay. Further, health insurance profits are among the lowest in any industry at 4% return on invested capital.

      As for people without the money to pay, since the federal government is forcing health insurance on everyone, those that cannot pay will receive subsidies from the rest of the taxpayers. However, at what point is one's health not important. Is it more important to own a house and a car? How big of a house? How nice of a car? Where does insurance fall in the budget? Between the cable bill and the monthly payment on the 52 inch HDTV? Should we go to dinner and a movie every Saturday night? Budget decisions need to be made every day by everyone. Where does the transfer of risk of financial burden fall?

  3. swdowling says:

    Metatrader, that is the question. Why do we have to pay for insurance? I believe it is a choice. A choice that everyone needs to make and on their own terms and particular to their own situation.

    We shouldn't have to pay for insurance, but in certain instances the government, federal/state/local require it. If you hold a mortgage on property, your contract to hold such property likely requires insurance. If you own a car, the local/state government requires you to have auto insurance. Now, President Obama and the Democrat led Congress are requiring you to have health insurance.

    You can choose to avoid two of these, but you can't avoid the third. You can choose to not own an automobile and you can choose not to have a mortgage. Thus, you need no insurance. But, you just can't choose to not live as an American in America (well you can, but you wouldn't be here) – so you are now being required to purchase health insurance.

    Further, if you read my post on Medicarehttp://www.insuranceinthelight.com/?p=86 you will see that prior to 1966 when Medicare started, patients paid doctors out of their own pocket. Insurance reimbursed patients after the doctor was paid. There was no such thing as Major Medical insurance.

    Next time you see the doctor, don't sign the papers they require. Tell the doctor that you will pay him from your own pocket. See my post on changing your health care purchasing behaviorhttp://www.insuranceinthelight.com/?p=73. Once patients refuse assignment en masse, providers will need to compete and costs will drop for insurance and care.

    As for your comment about insurers making money and fooling them, I can't say that I agree. Insurance is a product to transfer the risk of financial burden due to catastrophic loss. It is a product just like any other that you purchase. The maker of the product is entitled to make a profit. The government aside, you are free to choose the product from whomever you wish at whatever price you are willing to pay. Further, health insurance profits are among the lowest in any industry at 4% return on invested capital.

    As for people without the money to pay, since the federal government is forcing health insurance on everyone, those that cannot pay will receive subsidies from the rest of the taxpayers. However, at what point is one's health not important. Is it more important to own a house and a car? How big of a house? How nice of a car? Where does insurance fall in the budget? Between the cable bill and the monthly payment on the 52 inch HDTV? Should we go to dinner and a movie every Saturday night? Budget decisions need to be made every day by everyone. Where does the transfer of risk of financial burden fall?

  4. Don Mehus says:

    Excess major medical is a diamond in the rough, The last defense for the seven common illness's that cost 75% of the national health care costs. for a few dollars a month

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