If you are unemployed, self employed, a student, or simply not covered by a group health insurance plan, you might consider obtaining an individual health insurance policy.
Usually these plans are more expensive than group coverage provided through an employer. However, unlike a group health insurance plan, you are not limited to a certain insurance company or program. In this sense, an individual health insurance plan can be custom fit for your particular situation. This gives you the benefit of comparing insurance until you find the best coverage suited specifically for your needs.
For example, for a young adult woman in her child bearing years, maternity coverage will greatly increase the premium you pay for your insurance. In a group insurance policy, you might not have an option to dis-include this provision. In an individual policy, you can customize the plan to include on the types of coverage you expect to need.
The downside can be the cost, and the underwriting requirements to obtain coverage. The underwriting process (which includes medical history and other important personal factors) is much more stringent for an individual than for a group policy. If you are uninsurable due to certain pre-existing conditions, you might find it impossible to obtain an individual policy, or you might find it extremely expensive.
If you must get an individual health insurance policy, I recommend you shop various companies to compare cheap insurance rates. To find quotes, you can talk with a local agent or shop online. Places to look online include EHealthinsurance.com, Anthem, and Humana.
To obtain a quote, you will have to fill out basic information and to obtain coverage, complete medical exams. The premium for your policy will most likely be only an estimated cost until you complete the necessary medical requirements.
If you are self employed, but you have a spouse who is eligible for group health insurance, you might first consider whether it is cheaper (and/or better coverage) to join in on their plan, rather than purchase an individual policy. Most companies allow benefits to be extended to the employee’s spouse, children, and other dependents.
In addition, you might consider combining a high deductible health insurance plan with a Health Savings Account to take advantage of the tax deductions and flexibility associated with the account.
This is a weekly featured post on Own The Dollar from Sara Peak, a Certified Financial Planner and a veteran of the finance industry. In addition to her monthly “Money Matters” column in Kentucky Living magazine, she also writes about money and personal finance topics on her blog.
Be sure to look for more great featured articles every week from Sara. If you have a question or topic that you would like for her to discuss, please contact us.
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