OPINION: We know New Zealand has a problem with underinsurance, especially when it comes to health insurance.
For many people, this is essential. For others, it is not a priority, but rather a discretionary expenditure, because overall we have an excellent public health system and a ACC system that is well funded and paid for by our taxes. So why pay twice?
But it’s a fact that if you need elective surgery, you may have to wait awhile on the waiting list at your local hospital, and that’s when health insurance takes it all. its meaning by offering its main advantage: allowing you to quickly access private facilities.
With that comes greater peace of mind knowing that things happen quickly. Depending on the disease, this is a very big bonus.
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It also allows you to choose your own specialist and hospital among those participating with your insurer.
Of course, this coverage comes at a cost, so if you are going to buy it, you need to balance the cost against the benefit, and how that fits into your overall financial goals. It is essential to do thorough research beforehand on the type of coverage you need and its cost.
It will be different from person to person and from family to family.
If you are the sole breadwinner in your household and you fall ill, you may need access to health care that will allow you to return to work much sooner than if you would otherwise be on a list. public expectation.
Health insurance is also about ages and stages of life, and your financial ability to have reduced income due to inability to work or the ability to self-finance your health needs are all key considerations.
If you are young with no pre-existing medical condition, this might be a great time to purchase health insurance because if you then develop a medical condition, it will not be ruled out in the future.
If you are lucky enough to work for a company that subsidizes health insurance for employees, the choice is not that difficult. These plans can also cover family members and can often be set up without a health assessment.
If, on the other hand, you are older and have a fixed income and premiums go up, you may find that access to private health care is not worth the cost and choose to self-insure.
Medical insurance policies fall into two basic types: comprehensive surgery and hospital-only / elective surgery.
Comprehensive coverage is in addition to surgical treatments and can cover daily medical treatments, such as general practitioner visits, dental care, optical care, physiotherapy, radiology, and specialists.
Some policies cover regular check-ups and preventative health care. These types of policies are generally more expensive, and there is now a general trend towards “hospital admissions and operations” policies that offer modular add-ons such as specialist and diagnostic benefits.
Policies can also provide annual or per transaction coverage, and all have caps and limits, so it’s important to find the right fit to meet your needs and budget.
The costs covered and how they are calculated vary, but there are two basic ways: First, there is a list of treatments and procedures available, with maximum dollar values, Second, there is a maximum amount. that the plan will cover per year.
This is where you have to look at the details. It is essential to understand the definition of the costs of a policy. Some use the expected costs instead of the actual cost of the surgery, which may require you to pay the difference. Also be aware that some policies pay a percentage of the amount claimed, while others charge a fixed deductible (which you can set) and then pay the full amount (within the limits of the maximums). In these cases, it may mean that you need to have some money set aside or have access to funds to cover the differences.
Different insurers offer different levels of coverage within them. Some offer a discount if you are committed to maintaining a healthy lifestyle. This can include not smoking, low alcohol consumption, and routine physical fitness. Other insurers may offer a discount if your claims are low.
Most policies exclude claims for pre-existing medical conditions, which you will be asked to disclose when you purchase the policy. Health insurance is designed to cover health issues that arise after a policy begins, so pre-existing conditions are usually excluded from coverage. Insurers may impose a waiting period before coverage begins or charge higher premiums to cover them.
To review health insurance is often to take stock and think about what happens if I stop taking it and how would I feel? Can I self-insure? Can I rely on my financial situation to pay for the care I need when and where I need it, or do I have to continue paying for health insurance? Or just rely on the public system?
I’ve been fortunate to have health insurance my whole life – first on my parents’ policy when I was a teenager, then I switched to my own policy, and now we have a family policy.
Plus, I was fortunate enough to only have to use it once for something minor – to have my gallbladder removed.
But what this insurance did for me was make sure that if something serious went wrong, I could quickly access the assistance I need.
Like a lot of people, however, I treated him like a lock and walked away. It shouldn’t be. I am now investigating why my family has health insurance and the levels we need to move forward. It should also be part of your annual review of your financial health, wealth, and well-being.
In the words of my financial advisor: What risk am I willing to finance and what peace of mind do I need?
Katrina Shanks is the Managing Director of Financial Advice NZ.