Limited Policies

Limited insurance policies provide coverage for very narrow, specified risks. Oftentimes, insurance regulatory bodies don't look very favorably upon these policies because less-sophisticated buyers have sometimes purchased them believing the coverage that they were getting was much broader. It's therefore wise for the prospective insurance purchaser to study these policies closely in order to know exactly what's being paid for and the circumstances under which coverage will be provided. Some of the more common limited insurance policies are listed below.

Dread disease policies can be purchased to cover specific diseases named in the policy, such as heart disease or cancer. Generally, these policies cover illnesses that don't occur frequently, but account for significant costs when they do take place. Because of the low frequency of the disease covered, these policies are often fairly inexpensive in comparison to full health coverage.

Travel accident insurance can be offered as a benefit of either an individual or group accidental death and dismemberment policy. Benefits are limited to losses occurring from accidents while traveling, usually by common passenger carriers. However, these policies can also be purchased as stand-alone temporary coverage. Air travel policies purchased at airports for individual, one-time coverage are probably the most well-known type of travel accident insurance.

Hospital income, or indemnity, insurance pays a specific amount of money for each day that the insured is hospitalized. These policies pay an indemnity directly to the individual. They are not intended to cover expenses of hospitalization; instead, they're meant to provide a source of income that begins when the insured is admitted to the hospital and ends on the day of discharge. However, limitations may often apply. For instance, some hospital indemnity policies might include an elimination period; in such a case coverage would not begin on the first day of confinement. Limits may also be placed on the benefits paid for preexisting conditions.

Many insurers offer vision care plans because most comprehensive and major medical insurance policies only provide coverage for eye injuries or diseases. Vision care policies generally cover eye exams, the cost of lenses and frames or contacts, and other corrective items. Typically, these policies operate using a network of eye doctors and eyewear providers that the policyholder must use in order to receive benefits. Co-payments are normally required and may vary according to the type of plan chosen. Individual and family coverage is usually available. And as with virtually all forms of insurance coverage, limitations normally apply. For example, the policy may pay for only one eye exam and one set of lenses per calendar year.

Prescription drug policies can be accurately be described as discount plans for members. Individual health policies often don't cover prescription drugs. For an annual fee or premium, an individual can join a plan that provides varying degrees of discounts for prescription drugs. These plans, which normally require a co-payment, operate with a network of pharmacies that members must use in order to receive benefits. Generic drugs are often dispensed as a cost-saving measure. However, some drugs, such as fertility drugs, experimental drugs, and vitamins may be excluded from coverage. Individual and family plans are generally available.