The Real Need for Health Insurance

Why should I carry health insurance?

Why should I carry life insurance?

The answer to these questions are as varied as there are people in the world.  No one answer is meaningful to everyone.  There are many articles published every day that cover these issues, and my opinion is just that.  However, sometimes a new viewpoint is useful.

First, why should you have health insurance?

It depends, are you single? do you have a family? do you own a business?  what is your current health condition?

Let's look at two extremes:

Marty is a 23 year old female, healthy and physically fit.  She goes to the doctor once a year and never has any issues.  Does she need health insurance?  Need is a grey area, yes with no insurance coverage her doctor appointment probably runs under $150.  Her premiums for a health plan would be around $100/month without tax credits.  If we only factor this in the equation, then it just doesn't make sense to pay for coverage.  However, one thing to consider is an accident.  At the very least I would recommend accident coverage to a young, active, and in-shape person.  Statistically, the chances of a young person contracting a debilitating illness is low and the chances of an accident is high.  Accident-only plans are very inexpensive, and WHEN an accident does happen, can be the difference of having a lifelong debt and being able to quickly jump back into the saddle.

Jim is a 42 year old male.  Business owner, family man with 3 children.  No insurance coverage because he prefers to pay out of pocket for the kids and wife's annual visit even though he hasn't seen a doctor in 10 years.  Sound familiar?  Listen, business owner with a family you need the right types of insurance in order to #1- protect your family and #2- protect your business.  I have seen time and time again people wait until it is too late, either an accident or critical illness is introduced into the scene and the entire world crumbles.  This example is a no-brainer but most people would be surprised how many business owners, busy with their daily routine, forget about the basics.  It is heartbreaking when people do realize that insurance is not for after-the-fact.

Second, why should you have life insurance?

Life insurance is an interesting beast.  When I first started in this business, my primary clients were young couples with a family and Federal job.  This is the best time to get coverage because it is cheaper in the long run.  It's also a great time to build your future which includes a long-term financial plan.

People enroll into life insurance plans for several reasons:  1) replace lost income 2) create an estate 3) uncertainty

Again, if Jim in the example above does not make it home from work, imagine the impact on the family.  In more than one way, it is tragic.  Therefore, we're not talking about replacing a person - that's not possible.  But, we can make sure that in the event an uncertainty becomes a reality, then that family will continue to make its way through life.

An area that business owners don't think about, unless they are privileged to have a large company and already had a consultant come in to discuss the future of his company, is what happens to the business if the owner doesn't make it back into the office?  Too many times, a small business owner hasn't had the opportunity to discuss these things with anyone.  There needs to be a plan in place, it's the responsible thing to do.  With a business you have more than just your family.  You have many people's families to consider.  A good plan is essential, and insurance can help to find or to fund a replacement in the event of a tragedy.

Important: if you own a business and do not have some type of Key-Man or Business Buy-Sell agreement, you should do everyone a favor and look into it.

What about Marty in the example above?  Young but still an uncertain future as is the case with all of us.  Its a great time to build something for the future.  A small plan to begin building is a great start, but I would want to know more about the person before I could make a recommendation of any type.

Everyone needs some type of PLAN.  I'm not talking about an insurance plan, everyone needs a PLAN of action.  When something happens, what is the plan? 

For assistance in navigating the complexity of the new health options, please contact me through psyberquote.com .