Cheap health insurance — why is it so cheap?

How does health insurance work?

This is the easiest of all the forms of insurance to understand. You pay a set amount at regular intervals during the term of the policy. If you fall ill during the term and there are no exclusions or limitation that apply, the insurer pays out a sum of money to pay for your treatment.

How to you find cheap health insurance rates?

The first step is shopping around. You must get as many quotes from as many insurance companies as possible. Only when you understand what is on offer can you find the cheapest policies with the most generous terms.

What lifestyle issues affect the premium rates?

As a general rule, the youngest and healthiest pay the lowest rates. If you are expected to enjoy good health for many years to come, this means the insurance company can accumulate money, giving you the benefit of lower annual premium payments. So you are slim, do not drink excessively, have never smoked, have a job free of any hazards, and have no interest in any sporting activities or hobbies that are dangerous. But if you are overweight and have risk factors indicating a high risk of heart disease, your premium rate will be high.

Saving money

If you have an individual health plan, you will save money if you can join a group or, as a member of a family, you set up a family policy. If the premium rate for a standard policy is still out of reach, you could consider buying term cover. This gives cover for a short time and for a limited number of health problems. Some people decide they will pay for the treatment of all the more minor problems and reserve the insurance for the more catastrophic injuries and diseases.

Adjusting the deductible

The premium rate is always lower if you agree to pay a higher deductible, the amount you have to pay before the insurer pays out. This is a risk and, before you agree to accept a high deductible, make sure you can actually afford to pay it should a claim be made.

Upgrade term insurance

You pay relatively cheap health insurance rates for term insurance. If you buy a six month policy, you can either renew the term or upgrade to a full policy if your financial situation has improved.

Cheap health insurance — group or individual plans?

When looking for cheap health insurance, what do you do if offered a choice between a group and an individual plan? Which is the cheap health insurance option?

As the names suggest, an individual plan is a policy you buy from a private health insurance company, whereas a group plan is one you access because you belong to a group of people. The most common form of group plan is offered by employers. As the US fell into a recession, business at all levels found the going tough. Now, even though there is a tax credit to encourage small businesses to continue and, in some cases, expand health coverage, most employers have been asking their employees to pay more. Even so, these employment-based plans tend to be cheap health insurance as the risks are spread out among quite large groups of people.