The importance of health insurance

There are many forms of insurance. From insurance for your home, auto and life to insurance for your phone, jewelry or new device. Most types of insurance you may never actually need to use. That is not to say that you do not need to have it, but the likelihood of you needing to use it is relatively slim.

The most often used insurance is health insurance. This is because no matter what your circumstances may be it is likely that at some point you will need to see a doctor. Whether it is just a doctor visit for a checkup or when you have a cold, if you need to see a specialist or if you need to go to the hospital, there is a very high likelihood that at some point you will need to use your health insurance.

The reason why health insurance is so important is because of the rising cost of hospital bills. What they don’t tell you about health insurance is that it should really be called “Hospital” insurance. Why pay thousands of dollars in premium over the course of the year just to have an open ended liability on Out-of-Network bills? The real purpose of health insurance is to protect you in the event of a major claim at the hospital. 

The rising cost of hospital bills is directly reflected in the yearly increased cost of health insurance premiums. This is why it is more important than ever to understand your health insurance policy and how your coverage works. The real purpose of health insurance is to protect you from a catastrophic claim and put an absolute limit on the amount you are liable for. Over 60% of bankruptcies are a result of unpaid medical bills. The reason for this is that most people don’t understand their coverage and leave themselves exposed to an unlimited liability - something I will be covering in the next topic “Why understanding your health insurance policy matters.”