Sick Of Wasting Money On Insurance? What Do You Really Need?
You may have been kicking yourself for spending money on that health insurance policy you figured you need. If you already own a home and have assets like a car, it's possible that your individual health insurance is just an overpriced waste of money.
A quick look at the numbers can help in figuring out if you need to cancel your health insurance policy or keep it at all.
The truth is that if you have enough insurance, then you don't need it and don't need to pay for it.
The average family spends $1,292 per year on individual health insurance. One study by the Harvard School of Public Health found that the reason why many people buy health insurance is only to avoid a surprise bill that would put a strain on their budget.
Your annual spending can be as much as $10,000 when you consider the average premium along with increased cost-sharing (deductibles and co-payments). You'll also pay higher taxes because of having this kind of coverage. The out-of-pocket costs can be nearly half of your yearly income if health problems arise during the year.
What do you really need?
So how much do you need? You can't go wrong with a $400 deductible with a $500 per person annual out-of-pocket limit. That amount is equivalent to what others are paying. It's also enough to cover most health expenses, according to health insurance expert Melinda Mcclellan of The Employee Benefits Group. For example, if your monthly income covers your cost, the deductibles and co-pays won't exceed that amount.
But that's not enough insurance. You need more coverage and you can't count on your employer to provide it. Your employer is only required to offer $50,000 in health benefits if you have more than 50 employees. This figure is not enough for most families or individuals. The Employee Benefits Group estimates that people who don't get coverage through their employers spend an average of $4,000 each year on individual health insurance premiums alone.
This doesn't include costs of co-pays or deductibles if you have a worker's compensation claim or any other extracurricular medical costs.
Five things to consider
People with individual health insurance usually purchase their policies through brokers or agents. They are also known as agents because they help you get the best deals for getting insurance. Many people find that instead of needing health insurance, they simply need a new agent. Here are five things that could be the reason why you need to look for a new agent:
1.Your premiums keep going up every single year – This could mean that your agent doesn't have access to the plans or networks of your current employer's health plan. Agents who focus on small business products can give you lower rates because they negotiate directly with the insurer and PPOs (preferred provider organizations).
2.You don't know what you're paying for – Agents who only work with one company or have a limited selection of plans can't give you the best options available. They may also be making money by selling you a plan that's too expensive for your needs.
3.You expect them to do more for you– The extra benefits some agents offer like helping your family members get pregnant or giving you access to a concierge doctor can be a waste of money if it doesn't fit your lifestyle. 4.You don't know enough about health benefits and health insurance – The good news is that almost any agent can find you low-cost, high-quality insurance. The bad news is that you'll need to research options on your own. Don't be surprised if the first thing they do is to make you buy their PPO product.
5.Your agent hasn't changed your plan for at least a year – They may have failed to bring it up with your employer or changed it without your input. If you have questions, you should find out from your current agent what's been happening with your health plan. If you find that everything is fine, it's time to look for a new agent.
Here are some things that agents don't tell you:
1.They don't have enough information to give you good advice – Agents spend most of their time selling insurance instead of helping people make smart decisions about their coverage. Supplying them with enough information on your plan or network can be very helpful when they know what's available to you.
2.You have to pay for a plan the agent wants to sell you – It may be tempting because of the commission you'll get from it. More than 95 percent of agents make commission by selling insurance products. That commission is based on a percentage of your premium and doesn't include any billings or costs that you'll incur. It will also depend on how much coverage you buy and whether that's enough for your family's needs.
3.They fail to explain – You can't believe everything agents tell you unless they've made an effort to sit down with you and explain what health insurance is all about.
Conclusion
Health insurance can save your life in many ways. You'll get the best care from the right hospitals at affordable prices. If you have problems, you don't need to fear about how much it will cost you. You can also avoid being forced into a financial hardship by not being able to afford it.
There's no getting around it, though: health insurance is very expensive and is becoming more expensive every year.
You need to have it if you don't want to go bankrupt in case something happens or when adopting a child . They also offer prescription drug costs which are usually not covered under other types of policies unless they're an essential part of your treatment plan.