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Specified disease policies are not a substitute for comprehensive health coverage, such as a major medical policy that provides benefits in the event of a wide range of illnesses or injuries. Rather, specified disease insurance is generally designed to provide supplemental coverage on top of an existing health policy. For this reason, specified disease coverage is often sold as a rider, or special amendment to an existing insurance plan, rather than a stand-alone policy

Common types of specified disease policies include:

• Cancer
• Critical Illness
• Dental/Vision
• First Diagnosis Cancer
• Fixed Indemnity
• Medicare Supplement
• Preventive Care
• Specified Disease
• Specified Health Event

Important: If you do not currently have a health care policy, obtaining primary coverage in the form of a comprehensive or major medical health policy should be your first priority. Review the policy carefully to understand the extent of your potential out-of-pocket costs in the event of a claim, including deductibles, copayments, noncovered expenses, and the likelihood of treatment costs that exceed the policy´s maximum benefit. If you determine that you are still likely to have significant costs under your primary coverage, consider purchasing specified disease insurance.

You might also consider a specified disease policy if there is reason to believe you may have an increased risk of developing a certain health condition or illness. Such a reason might include your family history or certain health hazards associated with your profession. However, you should be aware that an insurance company will probably also evaluate these factors in determining your eligibility for coverage. If the company believes that you are a higher than average risk, you will have to pay a higher price for coverage. If the company determines that you are too great a risk for a certain condition, it may decline to issue a specified disease policy entirely.

The following shopping tips can help you obtain the specified disease policy that best meets your needs:

• Read the policy carefully. Specified disease policies are not standard in Texas, meaning insurance companies have considerable latitude in drafting their policy terms. One carrier´s cancer policy may not cover any costs of outpatient treatment. Another may exclude treatment of cancer-related illnesses such as infections. It is important that your specified disease policy doesn´t just cover the conditions you´re concerned about it, but that it covers them in the way that meets your needs.
• Supplement you´re existing coverage - don´t duplicate it. Many major medical plans contain a "coordination of benefits clause" that states the policy will not pay benefits when there is other coverage. In other words, a specified disease policy may not add to or increase your existing major medical coverage, but you still have to pay full price for both policies. In general, you should only purchase a specified disease policy if it covers costs or conditions that are excluded from your primary health coverage or if it pays benefits that significantly exceed the maximum payout of your primary coverage for the condition.
• Don´t buy based on emotion. Contracting a serious health condition for which the treatment costs exceed the maximum benefits of your primary health coverage is a real possibility, and not having sufficient coverage can result in an extreme financial burden. However, while it is true that three in 10 Americans will contract cancer during the course of a lifetime, this also means that seven in 10 will not. Excessive health worries or concerns may result in the purchase of an insurance policy that you don´t actually need. It´s important to make any decision about whether to obtain a specified disease policy based on an analysis of the level of your existing health coverage and current financial resources.

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