Sometimes life can feel a bit easier when we worry less about what can go wrong and get excited about what can go right. This year has given us a lot to contend with while keeping our health and those of our loved ones at the front of our minds—and protecting their health is certainly something we can get right!
With medical bills on the rise globally, health insurance plans have become the best way to reduce financial stress and get the care you need for your family. However, finding the right health plan can be off-putting. There are many different companies with an ever-growing variety of health plans. And then there is the jargon—let’s be honest, how many people know the difference between a policy and a plan? Exactly.
Understanding insurance anywhere in the world can be overwhelming so it helps to have a cheat sheet to help you select what you need and leave the rest to the experts. Focusing on just a handful of factors can help make the process simple and, over the next few weeks, we are happy to share a few important tips and questions to consider as you get started.
Tip No.1: Determining how much insurance coverage is needed.
Before we get into how much insurance coverage a person needs, let us share how we work out what coverage means:
Coverage is the amount of money an insurance company sets aside within a one-year period to pay for the healthcare costs of the person, known as the “beneficiary” or “dependent”, on the policy.
Think of it like a canopy or an umbrella designed to cover and protect your health. Therefore, coverage, and not just the premiums you will pay, should always be the primary focus when you want to make sure your loved one’s health is adequately protected. Every health insurance plan has a specific coverage amount, so the amount of financial coverage you need should guide your choice of a plan.
Now for the tricky part—how do you determine how much coverage is needed? Well, it depends.
It depends on the total cost of medical services you estimate will be necessary for the year ahead. This estimate is always different from one person to the next—therefore at Fleri, we believe that you should never take a one-size-fits-all approach to health insurance. Also, we know it is nearly impossible to estimate exactly how much a person will need.
With these points in mind, this is what we advise our customers:
- Start with an estimate of how much was spent in the past year on health services (or could have been spent if they went in for medical services) for the person who will be covered. This is more of an art than a science, so you can adjust your estimates wherever you see fit. A quick conversation with them about their physical and mental health needs usually helps.
- Consider any new health conditions they have developed or have concerns about. A lot of serious health issues can be avoided by paying close attention to early symptoms.
- Finally, include a generous cushion to those estimates to account for unexpected and sudden health emergencies or accidents.
As you read through these points, a specific individual may have come to mind. Think of the common health issues that are associated with their age, gender, and lifestyle choices, and how those should inform your choice of a plan.
The more medical services you expect them to use, the bigger the medical expenses could be, and therefore, the higher the coverage should be. However, if their needs are lesser, you do not need the most expensive plan to provide them the coverage they need.
Remember, the more comprehensive the coverage, the more you may pay in premiums, so you must find the right balance between what is needed for their health and what your budget is.
Bonus Tip: If your loved one has been on a health plan in the preceding year, you have more accurate data to work with! Pay close attention to how close they came to using up their coverage. A good rule of thumb is that if without any medical emergencies they used 70% or less of their coverage amount, you can keep a similar coverage for the next year. If in the same scenario they used more than 70% of coverage, that means that a higher amount may be needed to fully cover any health emergencies that pop up over the next year.
Feel free to reach out to any of our team members to learn more.
With the above information in your mind now, you can easily compare insurance policies and find the best coverage for your loved one’s back home.