What is the purpose of "catastrophic insurance"?

The purpose of catastrophic insurance is to provide coverage for major medical expenses once a high deductible is met. This type of insurance is designed for individuals who want to protect themselves against significant health crises without having to pay high monthly premiums for comprehensive coverage. With catastrophic insurance, the insured is responsible for paying a substantial portion of their healthcare costs out-of-pocket (the high deductible) before the insurance begins to cover costs. This can be particularly beneficial for younger, healthier individuals who may not require regular medical services but want safeguard against extreme situations that could lead to substantial financial costs, such as serious accidents or illnesses.

While some might confuse catastrophic insurance with covering routine or preventive services, its primary focus is on providing financial protection against catastrophic health events. Therefore, it aims to offer a safety net rather than covering everyday medical expenses.