Avoid over-lapping insurance policies

Take this example of a policyholder who has two medical insurance policies:

1. A Shield policy that pays 90% of the hospital bill in excess of $1,000.
2. A medical policy that pays 100% of the bill up to $5,000

The policyholder incurs a hospital bill for $8,000. The claimable amount is:

1. Shield policy: 90% of (8,000 - $1000) = $6,500
2. Medical policy: $5,000

The policyholder can only claim up to the bill of $8,000, i.e. $5,000 from the medical plan and $3,000 from the Shield plan. But, he had to pay a full premium for each policy.

It is better to avoid over-insurance through two over-lapping policies.