Tag Archives | health insurance

Health Insurance for Retirees

Health Insurance for Retirees

Health insurance is a popular product, with around 30% of the population having cover, often through a workplace scheme. However, there is a high cancellation rate amongst retirees due to the big increase in premiums as you get older. After paying premiums for some years, often without a claim, is it wise to cancel health insurance just at the age when you are most likely to need it? Premiums are higher in old age for good reason – there is a high probability of claim. Without insurance, you will be reliant on the public health system, which may mean going on a waiting list for health care. Insurance is a means by which we pass financial risk onto someone else. As with all insurance cover, there are three questions to ask.

  1. What are the risks? You may have a known existing health condition which is likely to get worse or lead to other problems. There may be a family history of certain medical conditions.
  2. What are the consequences of those risks? There may be loss of enjoyment of life resulting from non-urgent conditions that put you on a long waiting list. If you are still working you may also suffer loss of income through illness.
  3. How much risk are you willing to accept? If you have significant financial assets, it may be possible for you to cover private health care costs yourself without affecting your standard of living. Alternatively, you might choose to have an excess on your policy so you share the risk with your insurer and pay a lower premium.

There are many retirees with low incomes for whom health insurance is simply not affordable. Their best strategy is to live a healthy, active lifestyle and keep savings on hand for unexpected health care costs.

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Protecting Your Health

HealthProtecting Your Health

Happiness in life comes largely from three sources: relationships with friends and family, good health and having a clear purpose in life. Good health comes about through adequate housing, diet and medical care and statistics show that on average, those with more money have better health. With the increased pressures on the health system, health insurance plays a big role. According to figures recently released by the Health Funds Association of New Zealand, around 1.33 million New Zealanders are covered by health insurance. That’s around 30% of the population. It’s big business, with claims of around $1 billion a year. The best time to take out health insurance is when you are fit and healthy. Once you develop a medical condition, you may be faced with increased premiums or exclusions, just at the very time you are likely to need the cover. It is encouraging to see that younger people, in the age group of 25-30, are increasing their uptake of health insurance For a young person with no dependents and limited budget, a basic health insurance policy should rank high up the priority list when looking at insurance needs. Later in life, health insurance helps to avoid getting stuck in long hospital waiting lists for non-urgent surgery.

Health insurance is not cheap, but neither is medical care. The purpose of health insurance is to allow you to obtain a high standard of medical care without having to compromise your standard of living in paying for it. If you have substantial wealth, you can probably cover health costs without the need for insurance. Others should keep in mind that 1 in 2 people will suffer from cancer during their lives and that there are over one million hospital discharges a year in New Zealand. Don’t take good health for granted.

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