How much Health Insurance Do I Need?
One of the key questions that pops in your mind while considering a Health Insurance Cover is – How much Health Insurance Do I Need?
Well, your concern is absolutely right as there is no point having Health Insurance. which does not cover your medical or hospitalization expenses adequately in the time of a crisis.
As a matter of fact, the amount of Health Insurance Cover varies from person to person. There is no standard amount that can be put forward to you so that you can have that much of health Insurance cover with you.
It is purely a personal decision.
Another challenge that comes up in determining the amount of health insurance cover is the fact that health or medical expenses are usually unexpected. You cannot at any point of time be certain about how much medical expenses you would be incurring.
Having said that, your Health Insurance cover should provide for expenses such as hospitalization, physician expenses, prescription drugs, laboratory tests, maternity, preventive care, and as well as emergency services besides having room for other kinds of medical expenses.
You have a number of options of obtaining a personal health insurance cover. You can go for a group health insurance offered by your employer. You can apply for a state health insurance and lastly you have the option of purchasing a private health insurance cover through an agency or broker.
You have to make sure that your total health insurance cover is enough so that you do not fall into debt because of the medical expenses.
Here, we have come up with certain important considerations which can help you to decide how much health insurance would be sufficient for you to meet your medical expenses.
1. The Age Bracket You Are In
The Age Bracket serves as an important criterion of determining the amount of health insurance cover needed by you.
Let us give you an example to show its relevance to you.
Suppose you are in the age group of 20-25 years.
In this age group, generally there is no danger of any critical illness. However minor health problems cannot be ruled out which may require hospitalization, operation and other medical expenses. Then the chances of encountering an accident are always there.
So with a little research and depending upon the region where you live, you can easily figure out the average medical expense which you might incur. Depending upon this figure, you can determine the amount of health insurance cover which you need to have.
2. Any Pre-existing illness
In case you are suffering from any pre-existing illness, things might be quite different for you. In such a case, you need to know what are the average medical costs involved in the treatment of such an illness. Besides this, you need to know what other complications might arise due to your pre-existing illness and figure out the expenses involved in their treatment. So when you go for taking health insurance cover. you insure yourself totally against these illnesses or health complications.
3. Your Work Profile
There are certain specific health or life hazards associated with certain work profiles. Suppose that you are working is a Mining Industry. You invariably need to insure yourself against the illness or health dangers generally occurring to people working in a Mining Industry. So your health insurance should cover all the costs involved in the treatment of illnesses or health problems happening in a Mining Industry.
4. Your personal habits
Your personal habits play a crucial role in determining how much health Insurance is needed by you. For example, a smoker is likely to get more illnesses or health complications than a non-smoker. So if, you are pursuing habits which are detrimental to your health, your health insurance should be of such amount so as to cover the medical expenses if you fall ill due to health
complications arising out of your (bad) personal habits.
5. Your Affordability
Though one would like to have the maximum amount of health insurance so as to cover the costs of any kind of medical expenses but this is not always possible. Everything boils down to your premium paying capacity. That is to say you can take that much amount of health insurance for which you can afford to pay the premiums. So your affordability is the key to buying a specific amount of health insurance cover. You have to look at your expenses and your total earnings and then decide how much health insurance premium you can afford to pay. Generally, 1% to 4% of your yearly earnings can be easily utilized in paying your health insurance premiums.
6. As a percentage of your yearly Income
Another way to determine the amount of health insurance is to base your health insurance cover as a percentage of your yearly income. Ideally your health insurance cover should be equal to your yearly earnings. So if, you are earning $20000 per year, your health insurance amount should be equal to $20000. On the lower side, you can keep your health insurance to be equal to 50% of your yearly income. This would enable you to meet your health or medical expenses to a fairly large extent.
7. Past Medical Expenses
Past medical expenses can actually prove a guiding factor in determining your health insurance cover. For a person who has made medical expenses in the past should obviously go for a higher amount of health insurance cover than a person who has made no medical expenses in the recent past. Based on the past medical expenses, one can come out with a general formula for calculating the amount of health insurance cover which equals to the 50% of your yearly income plus 100% of past medical expenses of last 5 years.
8. Average Hospitalization Bills
One of the easiest and most logical ways of determining health insurance cover is to find out the average hospitalization bills incurred these days. So, list down top 10 medical ailments for which people are being hospitalized and figure out the average medical costs incurred in treating them and then take health insurance accordingly. Thus if, the average medical or hospitalization costs comes to about $10000 for treating the top medical ailments, then taking a health insurance cover of $10000 should suffice your requirements.
9. Your Marital Status
Your marital status is another factor which determines how much health insurance cover you should possess. So if, you are married it is just not enough to take health insurance for yourself. Thus, instead of taking personal health insurance, you should opt for family health insurance plan covering yourself, your spouse and children. For instance, if you have X amount of personal health insurance, the amount of family health insurance should be at least 3 times the X amount, that is three times the amount of personal health insurance.
10. Devise Your Own Method
Besides following the above methods for calculating the amount of health insurance, you can even devise your own method. You have your point of view and so can come out with a unique way of deducting the right amount of health insurance cover for yourself and family. You can choose your own set of parameters for deciding the amount of health insurance cover needed by you. The result would be a more viable and correct figure of health insurance cover that can adequately cover your entire medical and hospitalization expenses.
So you see that you can actually figure out how much Health Insurance cover is required by you. There is no need to bother about, “How much Health Insurance Do I Need?” Simply follow the methods listed above and get to know the figure of health insurance cover that you should hold with yourself at any given point of time.Source: www.moneyglare.com