A major or catastrophic medical insurance plan, although being rather speculative, is fairly cheap but is also deductible.

The money that you pay up from your own funds before the insurer meets the balance is the deductible.

As an example: if you have a deductible set at $5000 and your visit to a hospital results in a bill of $12, 000  your insurance provider will pay $7,000 only towards the bill and you meet the balance.

On this type of cover, the larger your deductible is, the smaller the premium. By taking up this option, you will be gambling on not needing any major medical expense soon.

It would be a reasonable gamble. One survey that was conducted showed that in the US, 90% of the population has medical expenses less than $2000, and for 73%, their expenses were less than $500 per annum.

Two main groups favor the catastrophic health insurance: the young who are in their 20's who feel their health is not at risk and elderly men between 50 and 65 who would be waiting on Medicare eligibility.

The catastrophic health insurance plan is designed to cover only against major hospital expenses rather than day-to-day medical expenses. It will not normally cover doctor's visits, maternity care, or prescription drugs. The cover usually excludes mental health conditions, substance abuse and some pre-existing medical conditions.

This catastrophic health insurance plan can be bought as a group plan or on an individual basis. Of late, many organizations have started to encourage their employees to take up this type of cover. The highest lifetime limit can be as much as $3 million.

Rates do vary on age and the area in which you live. In some states the savings on premiums can be up to two-thirds. As an example: a female of 21 years, non-smoker, could have a monthly premium of only $30.

Before taking a decision to select this cover, get some professional advice from agents, insurance companies or both and compare quotes.

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