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Plan Lets Insureds Buy More Coverage After They Get Sick

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A unit of American Community Mutual Insurance Company has come up with an alternative to mini medical plans and catastrophic health insurance plans with extremely high deductibles.

Precedent, Dallas, a division of American Community, Livonia, Mich., has introduced the Precedent Remix family of individual limited benefit health insurance products.

The Tempo, Rhythm and Groove plans in the new family pay a maximum of only $1,000, or to $5,000 in benefits per plan year.

But policyholders who exhaust the benefit maximums also get a guaranteed right to buy additional coverage without presenting evidence of insurability, Precedent says.

The cost of the additional coverage will depend only on the age and sex of the insured, Precedent says.

A premium tool estimator on the Precedent Web site predicts, for example, that a 25-year-old male purchaser of the Rhythm plan, which provides a maximum of $2,500 in benefits, would pay about $2,250 for $2,501 to $10,000 in additional coverage. He could pay about $9,000 for a total of $5 million in lifetime coverage.

A 60-year-old male would pay $3,750 for $2,501 to $10,000 in additional coverage and $13,750 for $20,000 to $5 million in additional coverage.

Insureds with good credit can work with an outside finance company to pay for the additional coverage with monthly payments, Precedent says.

Precedent estimates, for example, that the 60-year-old male who wanted the maximum amount of coverage could buy the coverage by making monthly payments of about $418

Premiums for the underlying limited benefit plan are about $100 per month for healthy young individuals, Precedent says.

The Rhythm plan has a $250 deductible and pays 70% of the cost of in-network care up to the $2,500 annual benefit maximum.

All of the plans pay 60% of prescription drug even before the deductible is met and provide a $400, no-deductible annual wellness benefit, Precedent says.

Insureds can activate the additional coverage by notifying Precedent about an interest in buying the additional coverage within 60 days after the end of the applicable benefit period, the company says.

The policy excludes coverage for pre-existing conditions for 2 years starting on the effective date of the policy coverage.

Precedent has started out selling the product family solely through the Web.


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