My husband and I have recently been reviewing our insurance coverage to figure out exactly we need as a married couple with no kids. We want to have enough coverage to handle personal disasters without draining our finances, but we don’t want to waste money on unnecessary coverage. Our two biggest needs are health insurance and life insurance, so that’s what I’ll be talking about here.
Skimping on health insurance can place you in a financially precarious position. My friend’s father gambled by not carrying a health insurance policy, and he’s still paying for it years later. He thought that he could save some money since he was generally healthy, but that decision wound up costing him much more than he would’ve paid in premiums.
He’s been fortunate enough to to retain ownership of both his business and home through this ordeal, but others aren’t so lucky… Did you know that medical bills are the #1 cause of bankruptcy?
Finding affordable health insurance
If you’re currently working, you may already have health insurance through your employer. If not, check with Human Resources to see if you qualify for coverage. In some cases, you have to work for a minimum amount of time (e.g., 90 days) before you’re eligible. Employer coverage is great because the premiums are often lower than what you can get on your own.
If you’re currently temping, you may be able to get health insurance through the temp agency. For example, when we first moved to North Carolina, my husband used the temp agency’s health insurance and I used my job’s insurance to keep us both covered with minimal out-of-pocket expense.
If you don’t qualify or your job doesn’t offer health insurance, you’ll have to look for private health insurance. You can get a good sense for the prevailing prices by looking at sites like Insure.com or HealthQuote 360.
If you can’t afford comprehensive coverage, you should consider looking into catastrophic coverage (sometimes referred to as “major medical” coverage). These policies have lower premiums, but only cover catastrophic illnesses or injuries.
I searched online for a catastrophic insurance policy and found a few in the $65-$80/month range. As with everything, carefully compare health insurance policies before signing up.
Â» How to Save Money on Health Insurance
The main purpose of life insurance is to fulfill your financial obligations after you die. Beyond deciding if you whole or term life insurance, you also have to decide how much life insurance you need.
Finding affordable life insurance
My husband currently has a small life insurance policy through his job, but we’ve been looking at increasing our coverage. We ultimately decided that a low-cost term life insurance policy is the best for our needs.
Since everyone’s needs are different, you should give careful thought to how much insurance you need. While there are some handy rules of thumb out there for “sizing” your life insurance policies, nothing beats running the numbers yourself. Here are some key questions to consider when determining your life insurance needs:
- How much money will you need for your funeral?
- How much support will your dependents need?
- How long will they need this level of support?
- Do you have any one-time obligations, such as a mortgage payoff?
Buying a term life insurance policy when young and healthy typically results in low premiums. Being in generally good health and avoiding risky behaviors such as smoking also helps keep your rates down.
Once again, online insurance comparison sites such as Insure.com or CompuQuotes or even here at FiveCentNickel can be a great way to get a handle on the prevailing rates. In our case, we found that a $100k, 30 year term life insurance policy would cost around $251 a year. Of course, this will vary based on age and health.
What sort of coverage do you have? Group health insurance? Or do you have a private policy? What about life insurance? What sort and how much?