Unfortunately, not everyone is lucky enough to have health insurance coverage.  This might be because their employer doesn't offer it or perhaps they simply cannot afford to pay for it themselves.  One thing is for sure, not having health insurance is a very big worry to people.  What happens if you end up in an accident or come down with an illness that requires massive medical bills?  You may not have the funds to pay for it.

This is where catastrophic health insurance (also known as “major medical insurance” comes in.  It's certainly not the perfect health insurance but for many it's the best option available to them.  Basically, this type of insurance is all about having a high deductible but a low monthly premium.  The amount you spend each month will radically vary as it is dependant on a number of factors.

If you choose a policy with a low deductible (eg $250) you can expect to pay a lot more than someone with a deductible of $10,000.  This is all down to how much of a risk the insurance company views you.   Generally you'll find that insurance companies pay out on things like x-rays,  lab tests, surgery and intensive care.  Catastrophic health insurance is just that, meaning if you want weight loss surgery, dental implants or IVF you won't be covered.  It's really only for people who need urgent treatment to save their life.

Another interesting thing is that if you are on a high deductible plan that comes under IRS definitions then you can put money in a savings plan called a Health Savings Account (HSA) so that you can pay for any medical expenses plus that money is also tax-deferred.

Be careful, if you think you will be pregnant any time soon, you might not be covered by your catastrophic health insurance.  So talk with your insurance company and find out if they have any particular stipulations when it comes to pregnancy and maternity care.

Time and again, catastrophic health insurance  is taken out by those who are young and self-employed or don't have insurance with their job.  Also, people who are older but don't qualify for Medicare.  Healthy people who rarely suffer from any illnesses will often take out this insurance as they would rather pay for the occasional doctors visit than to be paying high premiums every month.

Unluckily, if you haven't been so fortunate with your health you might not be entitled to major medical insurance because you'll be seen as too high a risk.  So if you've got diabetes, MS, heart disease etc then you'll have a hard time trying to track down any company who will insure you.