Medical reinsurance is a risk-management arrangement in which a primary health or disability insurer transfers a portion of its medical claims risk to a reinsurer. In life and health markets, medical reinsurance can take the form of quota-share, excess-of-loss, or stop-loss coverage, designed to protect the ceding company from unusually large individual claims or aggregate claim levels that exceed expected experience. By spreading risk across multiple entities, medical reinsurance supports financial stability, capital efficiency, and the ability to offer broader coverage or higher benefit limits. Reinsurers provide not only risk capacity but also underwriting expertise, claims consulting, and product-development support. For combination life and health products-such as life insurance with chronic illness or long-term care riders-medical reinsurance may be integrated with traditional life reinsurance to address both mortality and morbidity components in a coordinated fashion.

Advisors and policyholders rarely interact directly with medical reinsurance, but it influences the products they see and the underwriting decisions they receive. From a carrier perspective, actuarial and risk management teams negotiate medical reinsurance treaties that outline which claims will be shared with the reinsurer, attachment points, premium rates, and reporting requirements. When a large health or long-term care claim is submitted, claims examiners determine whether it meets the thresholds for reinsurance recovery. In product design meetings, carriers may rely on reinsurers to model the impact of new benefits, riders, or underwriting changes on medical claim costs. For distributors working with impaired-risk or high-benefit cases, knowing that a carrier has strong medical reinsurance relationships can increase confidence that the company can support large losses while maintaining competitive pricing and financial ratings over time.