Short term medical insurance is the most popular type of health insurance issued to individual health plan applicants today. Many of these applicants have never been counseled by a qualified insurance adviser so the potential of problems related to misunderstandings is increased. This article is meant to highlight many of the areas of misunderstanding but is not meant to replace the advise of a qualified personal adviser or a careful reading of your insurance policy.

This is called “non-cancelable” coverage. That coverage option added as much as 35% to the cost of health insurance and was not necessary for more than 90% of the health plan’s members. Since cost has been the primary driver of health plan sales, insurance companies were eager to promote lower cost policies that expired after a certain length of time. These plans are especially popular with recent college graduates, people between jobs and those starting a new small business.

This is the most generous definition of coverage in use among health plans today and basically means something that is prescribed by your doctor in accordance with American Medical Association standards. These policies cover medical expenses only. Dental expenses and ordinary vision care are not considered medical expenses. Most policies cover prescription drug expenses the same as any other medical expense. Most policies have a maximum coverage limit of $1 million to $5 million for catastrophic claims.

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