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May 03, 2011


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I've long held the view that people should treat health insurance the same way as all other insurance - buy it, but hope you never need to use it. However, most people treat their health insurance plans as payment plans for health costs - then they wonder why insurance (and health service) is so expensive! Health service is expensive in large part because people are detached from the actual costs because it's covered by insurance. If routine health costs were all paid out of pocket and health insurance just covered catastrophic illness (in the same way as auto maintenance is paid out of pocket but accidents are covered by insurance) then costs would go way down on all fronts.

Insurance companies have just gotten so ridiculous to deal with that most people fervently HOPE to never have to deal with them.

I am sure you covered this in another post, but it is worth reiterating.
Life insurance on the low wage earner is not just to replace that person's income, but also to aid the high wage earner's grief processing. The high earner is likely to need time off, possibly lots.

Insurance is risk management. You are betting that if something does happen to you the insurance company will help you out. The insurance company is betting on you not needing it.

Either way you need to protect yourself.

I agree with the last "new rule" too. That's why buying "insurance" to repair a laptop or other small electronic device is usually just a waste of money. If you would have the money to fix it if it breaks, why not wait to pay until when, and if, you actually need to do so? Why take the chance on paying ahead of time to repair something that might not break?

Also, I treat my computers like they're made of fragile glass and I'm very careful never to spill coffee or coke on them. It's not hard-I haven't killed a computer by spilling something on it in over 10 years of constant use of more than 8 hrs per day!

I'm always amazed by people who say they "have" to buy repair insurance for their laptop because they "always" spill stuff on it and break it. That's like saying that you can't avoid crashing your car each year during normal use. Dude, you need to be more careful.

If you are a person who can't stop spilling junk on your computer, why not just make it a habit to never drink anything when you're using your computer? Problem solved!

Do any of you receive professional liability insurance through your employer? If so, how does that influence the amount of umbrella insurance to obtain?

@Jonathon - I think the main problem with that viewpoint is that it is the catastrophic coverage that many people find out isn't covered. People think they have good health insurance because it covers their doctor visits only to find out that it doesn't cover the big stuff when they need it. or it does, but it has a cap, and once you've reached that cap you're SOL.

When the new rules say "make a claim as a last resort" what does this mean? Don't check to see if your insurance will cover something, even though you are paying into it every month / year? I agree with having a high deductible, but why wouldn't you make a claim on something that is covered?

You're correct, with the health insurance system in place you should certainly make a claim when warranted (and I do). My rant was actually about the way system itself is set up, and I think a part of that is the consumer's fault for going along with it.

Great tips on taking care of your health in relation to how much money you'll make over your lifetime. Protecting you/your family with medical, disability and life insurance should be no brainers for anyone with financial means to pay for the premiums. That's not to say you need a million dollars in life insurance coverage or the cream of the crop medical insurance. Talking with a financial advisor can be helpful and or discussing things over with your family. These things should be well thought out and not jumped into.

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