Do I Need Both Health Insurance and Life Insurance? | Insurance Professionals of Arizona

by Kent Stewart President at IPA

For an insurance professional, this is a loaded question. Of course you need both! They both serve and important purpose in your overall financial picture.

But probably what you really want to know is why. Why do you need health insurance and why do you need life insurance, and will either of them really make a difference in your personal financial situation?

The purpose of this article is to clear describe the reasons why health insurance and life insurance may be of benefit to you, what the risks are of not carrying them, and how you can make sure you have adequate coverage at the very best price for any budget.

FIRST, WHY INSURANCE?

No matter what kind of insurance we are talking about, the purpose of insurance is to protect you from risk. Insurance transfers the financial hazards and liabilities that can occur by accident away from you and transfers them to someone else. In this case it is usually transferred to a company that is willing to accept these risks of damage or loss in exchange for your money.

Life contains risk. That’s just a fact. Bad things happen. There are accidents, storms, unanticipated misfortune and catastrophes every day. We use insurance as way to manage these risks.

When you purchase insurance, you are transferring your risk of damage or loss to an insurance company. The insurance company accepts the risk and charges a premium to do so. This is the cost of your insurance policy. This is the cost of your protection.

For many people, insurance has negative connotations. Maybe it feels like just an added expense with no upside for you. Many consumers feel obligated to buy a policy that they “they don’t really need” or “will never use.”

But when you realize you have transferred all your risk for any possible catastrophe or problem to someone else, you can quickly see that these safeguards might be the best money you spend. As you use insurance to manage your risks, it becomes an investment in the protection of your assets and a huge factor in your peace of mind

A lot of comfort comes with the knowledge that you have financial arrangements in place if the worst happened. When it comes to your health, having that safety net is very important. Who will provide for your loved ones if you aren’t here to do it? How will you pay the medical expenses of a serious illness or chronic condition? Since we cannot predict the future, we simply need to be prepared for whatever it might bring. One of the best way to prepare is by having adequate insurance.

INSURANCE COVERAGE – THE WORRYING FIGURES

Most people in the United States are aware of the importance of having both health insurance and life insurance. However, many people still have no kind of coverage in place. Surveys have shown that more than 40 percent of citizens have no life insurance.

This leaves their families completely unprotected if something happens to them.

Meanwhile, when it comes to health-care coverage, the statistics are especially sobering. The numbers of uninsured is rising year on year. In March 2018, the figures for uninsured adults in the U.S. stood at 15.5 percent.

Around four million people lost their individual coverage between 2016 and 2018. When it comes to lower income families, the statistics are even worse. In March 2018, 25.7 percent of people with incomes under $30,000 had no medical insurance.

The figures for 2019 are not out yet, however, the federal government has eliminated the penalties for those who don’t get coverage. With this change, it is anticipated that another five percent of the population will drop their insurance. A couple of years ago, there were 27 million people in the United States with no health insurance. As these numbers go up, it doesn’t bode well for the nation’s well-being.

Sources of health insurance coverage in 2016 (Millions of Persons)

*Note: Due to multiple source of coverage for some individuals there is some double-counting in the components. The actual U.S. population in December 2016 was approximately 324m.

**Other: The 10m was reduced to tie to the total for “Other Coverage” of 90m. “Other” includes 23m persons (9m non-ACA marketplaces, 9m disabled in Medicare, 5m other)

Source Data: CBO “Federal Subsidies for Health Insurance Coverage for People Under Age 65: 2016 to 2026* (March 2016) Census Bureau ”Health insurance Coverage in the United States: 2015 (September 2016)

WHY LIFE INSURANCE – DO I REALLY NEED IT?

In 1965, there were 27 million life insurance policies sold in the United States. However, in 2016, the number of policies stayed constant at 27 million.

This, despite the fact that the U.S. population is 50 percent larger. In 1989, 77 percent of citizens had life insurance. Today, under 60 percent of people are protected.

Despite our best efforts, we are all going to die. That’s part of the deal. Life insurance is there to protect those who depend on you financially, by providing a contracted sum of money when you die in exchange for your premium. Anyone, therefore, who has someone who depends on them for financial support, should consider having a life insurance policy to provide for their dependents in the case of their death. Life insurance is primarily used to provide money if the insured cannot.

This insurance provides liquidity to pay the mortgage and the bills. It covers funeral expenses. It protects the remaining family members from financial hardship. A quick look at these benefits makes it clear why life insurance coverage is so vital if you have people who are counting on you financially.

Don’t Wait to Purchase Life Insurance

INSURANCE PROFESSIONALS OF ARIZONA

Every person and every family has their own health and life insurance needs that are unique to them.

At Insurance Professionals of Arizona we get to know our clients on a personal level so that we can understand their risks and minimize them as much as possible.

We offer insurance products from over forty different carriers and we have the flexibility to customize a health or life insurance policy that gives you the right amount of coverage and still fits in your budget. There are so many options available and we can help you navigate your many insurance alternatives to find what’s right for you and your situation.

Don’t leave your life or your family’s financial well-being up to chance. Manage your risks in a smart way and acquire the insurance you need to protect yourself. Insurance Professionals of Arizona can offer you all the advice you need about the coverage you really need and then help you choose the right policy to get it. You never need insurance until you need it—be sure you’re ready when you do.

We’re here to help! Call us today. 480-981-6338