When it comes to health insurance, many people tend to focus on the monthly premium and assume that all plans are the same. However, Christopher Cervantes, a Registered Financial Planner, emphasizes that picking the right health insurance plan is far more than just choosing the least expensive option. The wrong choice can lead to significant out-of-pocket expenses and coverage gaps that can cost you thousands in medical bills.
“Health insurance isn’t just about the premium you pay,” Cervantes told Financial Adviser PH. “It’s about understanding the coverage you actually need and finding a plan that best suits your health, financial situation, and long-term needs.”
Understanding Your Health Insurance Options
When selecting a health plan, one of the first things to consider is whether the coverage will provide access to the healthcare providers and services you need. Cervantes explains that Health Maintenance Organizations (HMOs) are a popular choice, offering coverage through specific provider networks. However, “HMOs usually don’t cover out-of-network costs,” he cautions. “So, if your preferred doctor or hospital isn’t in the network, you could be left with significant out-of-pocket expenses.”
In addition to HMOs, critical illness insurance is another important coverage option. Critical illness insurance helps cover the high costs associated with serious illnesses, such as cancer, stroke, or kidney failure. “If you get diagnosed with a critical illness, this type of insurance provides you with a lump sum payment that can help cover medical bills, lost income, and other expenses,” Cervantes explains. “Combining critical illness insurance with an HMO plan can significantly reduce your financial burden during a health crisis.”
Don’t Forget the VUL Option
For those seeking both health coverage and investment benefits, a Variable Universal Life (VUL) insurance plan might be the right fit. “A VUL plan allows you to save and invest while having health coverage. It can provide additional financial protection down the road, especially if you include riders like early-stage critical illness coverage,” says Cervantes.
The Bottom Line
Choosing the right health insurance plan requires careful consideration and understanding of your needs. “Before purchasing a plan, make sure it aligns with your healthcare needs and your ability to cover out-of-pocket expenses,” Cervantes advises. “Taking the time to choose the right plan today could save you thousands in medical costs down the line.”
The takeaway:
Picking the right health insurance plan isn’t just about saving on premiums. It’s about ensuring you have the right coverage to protect both your health and your finances. As Cervantes told Financial Adviser PH, “A little time spent understanding your options today can save you a lot of money tomorrow.”
