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I was recently approached by a carrier to sell more of an indemnity product for them.  It made me think a little about how these limited benefit plans work and some of the misunderstandings with them.  These limited benefit plans (aka:indemnity, cash hospital, cash cancer, etc...) have the purpose of either supplementing high deductible plans or providing a low cost alternative to health insurance.  So first point that needs to be clear, these plans are not health insurance.  They pay a fixed benefit amount per incident, to help with the day to day costs. This is the primary negative of these plans.  If you have a major event, this plan might help, but you can not count on it covering the whole thing and you can be stuck with a hefty bill.

There are several positives for these plans.  For starters they are typically limited in underwriting and sometimes even guarantee issued.  They can frequently be much less expensive than major medical.  If you do have a high deductible plan these can be a great way to supplement and assist as you pay your way to your deductible.  If you have minimal use and are a good shopper and negotiate your own rates than you can frequently minimize your costs with this kind of plan. 

As with everything there are two side.  It is always important to understand your needs when considering any plan.  To learn more about indemnity or limited benefit plans in Texas please contact the Garsys Agency today at 866-432-4753.
Posted 3:26 PM  View Comments

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