Health care needs are expensive. Whether it is health insurance premiums, paying until you hit your deductible or percentages of cost after, health expenses are ever growing. And there are so many ‘extras’ that you can add in.
What is actually right for you? Is there such thing as too much? Do you actually spend more on all the monthly fees with a low likelihood of utilizing the benefits? Like subscription services, people actually forget what they signed up for. There are accident policies, cancer policies, short term disability polices… that go unused even when a qualifying event occurs. Life becomes a guessing game of ‘what will happen’ and it is impossible to protect yourself from everything that life may throw at you.
I insure myself for the catastrophic and pay for the inconvenient.
For example, I have a life insurance plan. If I die, my husband would be devastated in so many ways – emotionally, physically, and financially. Life insurance is a low monthly cost (at my age) for substantial financial protection to take care of my husband if something happens to me. It would give him time to grieve, take care of households needs, and rebuild a life.
If I break my arm and can’t work for 6-8 weeks, that would be inconvenient and probably painful, but I have prioritized an emergency savings account, so an injury like that shouldn’t be as devastating.
Financially, it is smart to build an emergency savings or an investment account for 3-6 months of life expenses.
Instead of paying for short term disability, accident insurance, and all the others, I actually put that money to work for me. Rather than pay out for what I may never need, I am investing that money and it grows steadily over time. If I need it, I have it. If I don’t need it, I still have it.
For example, my mom had a stroke policy but ended up with cancer. So, before she died, she bought my dad even more policies – he had policies for cancer, stroke, cardiac events… but he ended up hospitalized and ultimately passed away from a GI condition. No money was ever paid out, even though they paid into the policies for YEARS.
If instead you ‘pay yourself first’ and build an emergency account, it is actually your money. If things go well and you don’t need it, then you can access it anytime for anything.
As always, you have a choice and should do your own research on what it right for you and your family.
Want to see some numbers? Check out Part II – Facts and Figures!