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Recommendations for Insurance
By admin | October 23, 2011
We typically insure ourselves against two types of perils. One is the small things that are likely to happen. The other is the big things that are unlikely to happen.
When advising my clients who are looking for health insurance in CT my recommendation is always to first make sure that the big stuff is covered. Catastrophic expense, by definition, devastates one’s finances.
An example of the first type of peril is the risk of needing to see a doctor for the flu. This is likely to happen, but is not costly. It is a small thing that has a good probability of occurring.
Purchasing an expensive no deductible health insurance policy to insure against the small stuff is usually a poor use of a client’s money. One pays extra every single month for a benefit that occurs relatively infrequently. And since this benefit is small, the cost could have been paid out of pocket by the insured. Paying out of pocket would have probably resulted in lower costs overall.
An example of the types of things that should be covered is the impact of a major disease like cancer. Major diseases often will include hospital involvement and costly procedures. For most of us, this is an unlikely occurrence but a tremendously impactful one. Buying a policy from Blue Cross or Connecticare to cover you for this type of catastrophic event is probably the prudent thing to do.
There are always administrative costs when an insurance company pays for something. For this reason, it may be cheaper to have insurance only for the big stuff and to pay for the small stuff out of our pockets.
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