How Policy Maximum Affects Visitor Insurance
How Policy Maximum Affects Visitor Insurance


While buying visitor insurance, it is required to choose a policy maximum amount. Policy Maximum as the name suggests stands for the maximum amount the insurance company is going to pay for services covered within any insurance plan.

Premium, Deductible and Policy Maximum

Premium is the amount of money charged by the insurance company for a particular insurance plan chosen by the insured person.

Deductible is the amount of money the insured person is required to pay for a medical service before his insurance plan comes into action and begins to pay. For example, a person opts for a plan with a deductible of $1,000. This means he is required to pay a sum upto $1,000 for any medical care and medication he receives. Only when this amount has been reached, insurance plan will come into action.

These three terms are interrelated and should be understood to have a better understanding of how much benefit the insured person enjoys and how much are the charges incurred for choosing a selected plan.

Higher the policy maximum, higher is the premium. But, higher the deductible, lower is the premium. Generally the policy maximum is $25,000 to $2,000,000 depending on a plan. Multichoice Insurance Services recommends a policy maximum of $500,000. It is always better to have a good/higher policy maximum since it is better to be on safer side than having inadequate coverage. Policy maximum covers a new sickness, injury and accident.

Coinsurance and Policy Maximum

A lot of times people are confused whether deductible, coinsurance and policy maximum are separate. The fact is deductible and coinsurance is part of policy maximum.

Coinsurance comes into action once the deductible has been met. It is normally a fixed percentage of the allowed amount for any medical service. It is a sort of cost sharing. For example, if the insurance plan’s allowed amount is $150 for a medical service, after meeting the deductible, the coinsurance amount is 20% of 150 that is $30. The rest of the amount i.e. $120 would be paid by the insurance plan.

Since policy maximum is the maximum benefit coverage available in a visitor insurance policy for unforeseen medical circumstances, therefore it includes deductible and coinsurance.

How much Policy Maximum is good for you?

How much Policy Maximum is good for a person’s insurance plan depends on following factors:

  • The travel plan- For example, a trip that involves extreme sports should have higher policy maximum because of the type of injuries that may happen in such scenario is much worse than normal flu and fever conditions when the trip doesn’t involve going out of the house that often.
  • Insured person’s age -Normally elderly people (70 & above) do not have various range of policy maximum. Insurance plans normally aimed at elderly age group offers $50,000 policy maximum.
  • Budget- Higher policy maximum means higher premium. Depending on how much the insured person can spend as premium, this is a factor that makes him choose policy maximum accordingly.
  • Trip duration- Longer the trip, higher is the policy maximum because more is the probability of needing medical attention.

Besides these factors, acute onset of pre-existing medical conditions, medical evacuation, and dental injuries have different limits apart from the policy maximum selected in the insurance plan. To understand these differences and to help you choose the right policy maximum for you, please contact MCIS today.



Category: Visitor Insurance

August 13, 2015 at 05:58 AM

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