3 Good Reasons Why You Need Health Insurance | Insurance Information

3 Good Reasons Why You Need Health Insurance

Too many times as an agent I would sit with prospective clients who would tell me all about their reasons for wanting health insurance but surprisingly didn’t have any. In most cases it wasn’t that they couldn’t afford it.

In fact a majority of these folks had substantial cash flow and tons of assets. They were torn between the fear of losing it all due to unforeseen medical emergency or having to commit to spending money on something they might not ever need. My intention in this article is to offer enough information to make the decision easier.

The basis for all insurance is assign the risk, or potential loss, to someone or something else. In this case the insurance company takes on the risk, after much due diligence in the form of underwriting, as long as the policy owner pays the agreed upon fees. This is typically referred to as a unilateral agreement. As long as the premiums are paid the coverage is in force and in the untimely event of a claim the insurance company must honor the contract but should the policy owner stop paying the coverage is rendered null and void. The company cannot “come after” the policy holder for non-payment.

3 basic reasons people own health insurance

1. If you do not have health insurance coverage, you have to pay for health care out of your own finances at the time of service. This very thought is usually enough to convince most people to buy medical coverage, but some people still prefer to roll the dice and hope for the best. Statistics have shown you can expect to experience at least one major injury or illness in your life which requires hospitalization.

I’ll give you an example from my own personal experience. My wife was unfortunate enough to contract appendicitis several years back. Keep in mind this is treated as a normal procedure and usually not life threatening. She is a very healthy person. Hardly a sniffle or complaint since I’ve been married to her. In my wife’s case the situation became serious pretty quick. We discovered her appendix had partially ruptured and gangrene had set in. Serious and frightening stuff to no doubt. The point of this is to show that things happen when you least expect it.

The end result was a hospital bill that reached almost $80,000 in less than 5 days. Think about that for a moment. Imagine something far more serious like a heart attack, cancer, stroke or worse. These could require weeks of hospitalization and recovery time. Chemotherapy alone can cost from $100-$10,000 per dose depending on the drugs used and cancer treatment requires multiple treatments. A stroke can often require weeks or months of rehabilitation at a high cost. You should get the idea now that getting seriously ill or injured is going to be costly.

2. You buy health insurance for the same reason you buy other kinds of insurance: to protect yourself financially. With health insurance you protect yourself and your family in case you need medical care that could be very expensive. Go back and read the previous paragraphs if you have any doubts or call your local hospital and ask the Billing and Accounts Department what the average costs are for the examples I gave previously.

3. You cannot predict what your medical bills will be. Nobody can…it’s that simple. I refer back the example of my wife and her appendicitis. This procedure varies depending on where you live and the hospital used but the average cost is between $15,000 – $40,000. Simply stated if you become ill, your bills could be very high. If you have health insurance, many of your costs are covered by a third-party payer, not by you. A third-party payer can be an insurance company or in some cases it can be your employer.

There you have it. Unless you have deep pockets and are able to absorb health care costs that could run into the hundreds of thousands of dollars consider looking into getting some kind coverage. If the thought of spending money on something you feel is wasted unless you use it then consider starting your own business out of the house and have it pay your insurance premiums. These can be legally tax-deductible if you set everything up correctly. A good financial planner or accountant should be able to help you with this.