This article from financial planner Adam Glassberg has some great information on how to avoid over-paying for your car, home, and life insurance policies. Many of us contribute too much monthly toward a policy that isn’t fully necessary, even in the event of a catastrophe. Beware of paying more money long-term while being fooled by incremental contributions.
But what about health insurance?
Health insurance is one area where we can end up spending the most money for financial reward. Does that sound a little counter-intuitive? It should. We all want to spend as little as possible on deductibles and have tiny co-pay and prescription costs. We fear personal catastrophe and spend portions of paychecks every single month to maintain the peace of mind that insurance companies claim to be selling.
However, health insurance should not function as a layaway, and that’s exactly how most tend to treat it. Ditch the cost of high monthly premiums and focus on what you can save if you are a reasonably healthy individual. High-deductible plans seem scary, but slowly emptying your pockets throughout the year seems scarier to me. By saving this money every month, you can afford to pay a higher deductible in the event that you do get sick, or keep those savings through retirement if you don’t.
We don’t bet on our car exploding, or our houses burning down, so save money by betting on good health, and huge savings as a result.