Stay Prepared for the Unknown: Health Insurance Constitutes the Backbone of Your Personal Finance

By Charles Hopkins Published 09/19/2006 | Finance

Stay Prepared for the Unknown: Health Insurance Constitutes the Backbone of Your Personal Finance

Nobody can predict what the future holds for them. In this high-paced modern world, the rate of becoming ill or contracting a deadly disease has increased to an alarming level and so has the rising costs to cure them. Accidents and natural catastrophe routinely occur to claim thousands of lives. Just imagine another way of surviving in this unpredictable world without the back up of a proper health insurance and you will definitely not be able to find any better means to provide you a financial shield against the unknown future than health or medical insurances.

In the absence of medical insurance you have to foot all the medical and health care bills from your pocket in the event of a hospitalization and treatments followed by serious illness or an accident. Even a couple of decades ago, instances of bankruptcy followed by the life threatening diseases in the family were not very uncommon. But today you can avail the facilities provided by several health insurances policies to make the future secure at least financially for you and your family.

There are a number of instances where health insurance can significantly contribute to keep up the health of your personal finance despite the costs involved with a serious illness in the family.

Armed with health insurance, you will be able to afford regular medical check-ups. This will help you to diagnose any disease at the earliest stage and reduce the chances of spreading an infection and chances of death due to the disease.

The people, who do not opt for a health insurance plan, often hesitate to visit a doctor and settle for OTC medicines in case of minor disorders. This only contributes to the long-term damages to your health requiring more expensive and prolonged treatments. On the other hand, health insurance will enable you to consult your physician in case of any types of uneasiness and eliminate the causes of disorder from the roots.

If you have the support of health insurance, you wont need to incorporate any unwanted lifestyle changes even if you have to shoulder some long-term medical expenses.

When you are going to buy a health insurance policy, your choice is restricted by mainly three types of products: Traditional fee-for-service health insurance plans, the Health Maintenance Organizations or HMOs and the Preferred Provider Organization or PPOs.

The first category of insurance plans is the most expensive of the lot. But you get absolute liberty with regard to finding health care providers if you buy such a policy. With HMO plans, you have to pay less, but your choice with regard to health care providers is also limited. The PPOs also demand lower co-payments with greater flexibility regarding the choice of a provider. You have to actually make a choice from a list of providers laid before you by the PPO companies.

If you are employed, you naturally become the part of a group insurance plan through your employer. In case of discontinuation with the job, you lose the group coverage. But the COBRA Act enables you to continue under the shield of group insurance temporarily if you agree to pay the full premium yourself. The divorced spouse or the child who has just lost dependent child status can also take the advantage of the same law.

If you are not employed you can take the advantages of government medical care programs such as Medicare, Medicaid or the Veterans Administration (VA). If you do not qualify for obtaining medical coverage due to particular health conditions, you can take the advantages of insurance pools offered by some of the states to their residents.