New Health Plan Features Low Premiums… and Lets You Hedge Your Bets
Monday Sep 17, 2007New Health Plan Features Low Premiums… and Lets You Hedge Your Bets in Individual Health Insurance
American Community Mutual Insurance has introduced a new health plan that comes with two tiers of coverage: a low-cost plan that includes up to $5,000 in yearly benefits, and an option to activate $5,000,000 in guaranteed coverage if the policyholder gets seriously ill or injured.
Activating the $5,000,000 in coverage will require an annual fee of $10,000. That’s a hefty price tag — but not compared to the cost of a major surgery.
Most insurance policies require you to purchase your coverage before you develop serious health conditions. The thinking goes like this: if everyone waits until they get sick to buy coverage, only sick will pay for insurance. This means more health claims are paid out, which in turn leads to higher premiums. (Health underwriters and economists call this adverse selection, in case you’re wondering.)
The American Community plan is unique in that it allows you to “buy into” additional coverage after you’ve gotten sick or hurt.
