How Does Health Insurance Relate To Financial Planning | Financial Buzz

How Does Health Insurance Relate To Financial Planning

There are numerous sections within a financial plan that needs to be considered. According to Investopedia a financial plan is a document detailing your current financial situation and your long-term monetary goals. It will also include the plans and strategies that you plan to use to reach your goals.

Health insurance is something that is encouraged by the government to help cover the costs of any medical appointments, or any health issues that may come up. The country has a Medicare system in place that covers everyone, and that you each must pay on your taxes every year.

If you make over $90,000 per year as a single person, or $180,000 per couple, you will need one of two things. You will need to have a private insurance policy to help cover costs, or you will have to pay a levy every year with your taxes that could be up to 1.5% of your income.

With that understanding now we can dive into the main topic of this article. Health insurance is a vital part of financial planning to cover the “just in case” that happens to all of us. Even if you have a low income and rely on Medicare to pay for your health issues, you need to take a step ahead and find a good agent from which to get medical insurance. Use an online site that compares plans from various carriers. For instance, the iSelect health insurance platform can save you a ton of time by doing the legwork for you.

A health issue can do many things to affect your financial status. We should go over a few of the most important ones to clarify why you should have health insurance, and how it relates to your short, and long-term, financial plan.

  1. Basic Medical Bills-Everyone has medical needs. Vaccines, physicals, yearly checkups, broken bones, and so on. You get the point. Medical care providers are a part of all our lives, and as such they need to be included in a financial plan. Maybe you did not need to visit the health clinic very much this year, but next year may be different. Budget an average amount into your financial plan and allow for variances that will happen.
  2. Serious Medical Issue-Nobody wants to think that something serious could happen to us. We all think we are invincible, especially in our younger years. The fact is, though, that a medical issue could come up at any time of your life. It may give you some warning, or it may not. You may even be too busy to deal with a sore on your arm, or a severe stomachache. Bottom line is that you could end up in a hospital for a while or be isolated to your home. If this happens you will get a ton of medical bills that will continue to add up. This could severely cut into your financial wellbeing. Health insurance can alleviate this by helping pay for any services needed. Whether in the hospital for a short stay, or laying around the house until you get better, a good policy will pay for your medical needs.

It may seem like a step in your financial plan that can be ignored. It is not, though. A good financial plan will include everything that is happening in your life now and will project what could happen in the future. It would be a shame if you lost all your savings and went backwards with your financial plans simply because of a health issue. A health issue that should have been covered by a private health insurance policy.

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