catastrophic health insurance, 1. health insurance that awards benefits to pay for the cost of severe or lengthy disability or illness. Benefits on some policies are not paid until a specified minimum amount paid by the insured is exceeded. Most policies have a limit in total benefits paid, and payment for certain kinds of services may be precluded or limited to a maximum indemnity. 2. a marketplace insurance category with a low premium and a higher-than-average deductible. You must be under 30 or have a hardship exemption to purchase this insurance plan, which is designed to protect the buyer from the cost of a catastrophic illness.
