How Much Health Insurance Do I Really Need?

In today’s world the cost of health care is rising all of the time. The fact that you just never know what could happen to you is reason enough to want to be covered by a health insurance policy. After all if you develop a major illness or are hurt in a really bad accident how will you pay your medical bills, your mortgage or rent and your household bills? You purchase health insurance for the same reason you buy other types of insurance- to make sure that you are covered financially for anything that could happen.

In today’s world the cost of health care is rising all of the time. The fact that you just never know what could happen to you is reason enough to want to be covered by a health insurance policy. After all if you develop a major illness or are hurt in a really bad accident how will you pay your medical bills, your mortgage or rent and your household bills? You purchase health insurance for the same reason you buy other types of insurance- to make sure that you are covered financially for anything that could happen.

If something unfortunate should happen to you then having health insurance coverage will not just protect you but also your family. Those who have no health insurance could be ruined financially because of medical expenses alone. If you have health insurance and get sick you have no way to predict how high your bills could become. If you have health insurance then the majority of your costs will be paid by a third-party payer (such as an insurance company) or by your employer.

After realizing the importance of having health insurance in the first place many people then ask the question- What is the minimum health insurance I should carry? This is not a question that has a simple or easy answer. The minimum health insurance that a person should carry depends upon their health and their life situation. For example, if you are a young person who is in college and you have no serious health concerns or conditions and you are not on any medication then you might be able to get away with a very basic health insurance policy. The more basic the coverage is the less you will pay.

A person who has a pre-existing condition would require a different type of plan then a person who does not have any such conditions. A married person with a family will need to purchase more than the minimum coverage depending on the needs of the family. If a loved one is sick then you will need to have more than just doctors’ visits covered. You will need a health insurance plan that covers prescription medication, hospital stays and the like.

The minimum health insurance a person should carry is very individual. Besides your life circumstances you must determine how much you can afford to spend. One aspect of choosing coverage is figuring out what you can reasonably afford to pay for premiums on a month-to-month basis. Compare this to what your out of pocket costs will be when you begin to use the benefits from the plan.

The soaring cost of health care is why you should get a health insurance policy that is suitable for you. It is important to compare the plans from one company to another in order to find the one that is most fitting for your needs. Even a small medical emergency can result in a hefty price tag. A series of small medical issues can further raise the cost. Medical costs can easily become a financial burden that you do not want to shoulder all by yourself. The potential cost to you of having no health insurance coverage at all though is even more frightening and more costly.

Sit down and figure out what your greatest needs are in terms of health insurance coverage. Then decide how much you can afford to spend on premiums. Once you have the answers to these questions you will then be able to decide the minimum health insurance coverage that is right for you.

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Calculate the Right Amount of Insurance Coverage 

 

Calculating the right insurance coverage is essential for the policy to make financial sense.

• Auto insurance: Check whether you want a comprehensive or collision coverage. A comprehensive insurance coverage could include accident, theft, floods, blizzards and vandalism. Depending on the probability of such occurrences, one can choose the required coverage. A collision coverage policy could include damage to your car or a third-party vehicle due to an accident. In case you owe money on your car, you may need to buy the comprehensive, collision and liability insurance coverage. Once you have paid off your loan, you can drop the liability coverage and opt for less comprehensive coverage, which can significantly lower your monthly insurance premium.
• Life insurance: According to experts, the insurance coverage for this policy should be ten to twelve times your annual, pre-taxed income. However, this thumb rule does not always work. You may also need to consider your family’s financial needs in various circumstances. Moreover, the extent of liabilities, such as loans and mortgages, must be considered. Also, consider any savings that you may be making for this contingency.
• Homeowner’s insurance: The coverage amount should be calculated to ensure that you have sufficient money to completely rebuild the home in case of severe damage. You may also consider including inflation and the value of contents inside the home when determining the insurance coverage.

Apart from considering specific details, take into account, the length of coverage required in each policy. Opting for a longer coverage term than necessary can unnecessarily increase the coverage amount.