Protecting your Finances with Health Insurance

“I’m paying all this money for something I’ll probably never even use.” If you’re like many people, you’ve had this thought when you look at how much you’re paying in insurance premiums. And you’re right. But if you do happen to need insurance, it’s a life saver for you and your finances. Last week we covered several of the most commonly needed types of insurance. This week we’re going deeper on health related insurance. Here are three key questions to think about.

Did you know medical bills are the leading cause of personal bankruptcy, even ahead of credit card debt? Health insurance is probably the most important type of insurance to have and is a big part of your financial safety net. You never know when you may unexpectedly get sick or injured. Young and healthy individuals may opt for plans with basic coverage while older individuals, people with young families, and those with chronic health conditions should probably opt for plans with higher coverage. If you go without health insurance, you’re fully responsible for the cost of your medical treatment and it could severely impact your finances for a long time.

If you became sick or disabled and unable to work, do you have other income or savings to pay for your basic living expenses, like rent or groceries? Disability insurance provides a percentage (average is 60%) of replacement income if you can’t work due to a disability (the disability could be permanent or temporary, and partial or total). The purpose is different than health insurance, it is so you can continue to pay your non-medical obligations while you can’t work. If you do have another source of income or significant savings, you may still want to think about how losing all or part of your income impacts your overall finances.

Who would take care of you if you’re unable to do normal daily tasks due to age or illness? Long term care insurance covers non-medical services that help with normal daily living activities (bathing, dressing, eating, etc) when you are no longer able to perform these on your own. Most people have to rely on family or friends for help if they don’t have long term care coverage.

To understand more about these types of insurance and who should consider these policies, read our full article here.  A BrightDime coach is also available if you have more questions. Just login and chat.