About Integrated Deductibles

Major medical insurance is a type of health insurance that provides coverage for a wide range of medical treatments and procedures. Some consumers choose to add a supplemental major medical policy to add coverage for additional claims. Those who choose this option may receive integrated deductibles as a term of their supplemental coverage.

Background: Deductibles

• In general, a deductible is an amount that an insurance company will not pay and must be satisfied by the insured. For example, if a claim is $10,000 and the deductible disclosed in the insurance policy is $1,000, the insurance company would pay $9,000, and the insured would be responsible for the remaining $1,000.

Background: Supplemental Insurance

• A supplemental insurance policy is meant to complement a primary major medical policy by paying for costs that are not covered under the primary policy or are over the maximum claim size for the policy. Supplemental major medical insurance typically carries its own deductible that can be assessed in a number of ways with integrated deductibles being one.

Identification

• With integrated deductibles, amounts paid with the primary major medical plan cover the entire amount of the deductible or a portion of it. This differs from other types of deductibles that may always require the payment of a deductible or some that require the payment of a deductible before the supplemental insurance takes effect.

Benefits

• Depending on the situation, integrated deductibles may result in the insured never having to pay a deductible to have the benefit of a supplementary major medical policy.

Considerations

• Integrated deductibles are not available with all supplementary insurance plans. If the insured wishes to have the option of an integrated deductible, it is important to carefully read the policy in order to ensure that the feature is included in the coverage.