If you have a choice about features of your policy, it's not easy to foresee how to reach the best balance of premium amount with benefits, and amount of deductible, co-insurance, stop loss, and lifetime maximum.

You can reduce premiums by:

• Increasing the amount of the annual deductible
• Increasing the amount you pay as co-insurance
• Decreasing the benefits
• Decreasing the lifetime maximum. (NOTE: Thanks to Health Reform 2010, health plans issued on or after September 23, 2010 cannot include a lifetime maximum.)

If you think about insurance as a way to pay for unacceptable medical expenses, then it becomes clear that saving dollars now to decrease a lifetime maximum becomes really risky.

With a history of a life changing condition, it seems likely that you will incur a basic amount of health care expense each year. You can pay an insurance company to cover those costs. However, trading dollars with an insurance company is expensive. If you pay the medical costs directly, it only costs you $1.00. On the other hand, if you want the insurance company to pay, it will cost you $1.00 plus money to cover the insurance company's overhead, administrative costs, and profit.

The amount of co-insurance that works best for you relates to the amount of the stop loss, which in turn depends on the amount of money that becomes an unacceptable risk to you.

The balance becomes even more difficult if you are part of a unit with a spouse/significant other and/or children.

An experienced insurance broker or financial planner can help you figure out the balance for your life.

Please share how this information is useful to you. 0 Comments