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Short-Term Catastrophic Health Insurance

Short-term and catastrophic health insurance is only advantageous for certain individuals. Only if you need coverage for a short period or just to protect yourself against very large medical claims would you consider these types of policies. Short-term and catastrophic policies may be less expensive than comprehensive individual or group health insurance, but they may be very limited in coverage.

  1. Catastrophic Health Insurance

    • Major medical insurance, often called catastrophic insurance, is designed to protect against catastrophic financial loss. These plans typically have high deductibles and maximums but low premiums. Considered more affordable than individual health insurance, these plans are limited in scope. Catastrophic policies do not cover small claims but do cover high-dollar hospital and medical services over a high-deductible amount. Premiums for these plans are determined by deductible, coinsurance, stop-loss and maximum dollar amounts.

    Short-Term Health Insurance

    • Short-term health insurance policies are considered period of time policies as they are only issued for a specified term. Once that term expires, the policy is not renewable. Most short-term policies are available for one- to six-month periods but may be longer depending on the insurer. Short-term policies are ideal for those between jobs, in a new hire group insurance waiting period or recent college graduates. Depending on the insurer and the design of the policy, short-term policies may or may not cover small claims. However, these policies will almost always exclude pre-existing health conditions.

    Catastrophic Short-Term Policies

    • Most catastrophic policies are available as short-term nonrenewable policies. Often the short-term plan will not cover services such as preventive care, pre-existing conditions, out-of-country care, routine care, dental or vision. Each policy is different, so it's important to check the exclusions and limitations before purchasing the policy. Although affordable, your coverage is not comprehensive and should not be considered if you are unhealthy, need long-term care and seek medical services frequently.

    Finding Catastrophic Short-term Insurance

    • You can purchase catastrophic short-term insurance policies directly from the insurer or through a licensed health insurance agent. Many national health insurers such as United HealthCare and Assurant Health offer short-term policies. One advantage of short-term policies is that they are often effective within days and do not have waiting periods. You will not need a medical exam or be subject to strict underwriting criteria with short-term policies as you would with individual policies.

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