Personal Finance: How To Be Smart With Your Money

Group insurance is the most common type of coverage in the United States today. One can usually obtain broader benefits at a lower cost if one is covered as a member of a professional group, a service club or as an employee of a covered company. However, for a slightly higher premium one may join associations
such as Blue-Cross Blue-Shield or Kaiser as a non-group subscriber and receive similar benefits. With both spouses frequently working nowadays, it is not uncommon to find oneself covered under more than one group policy; once as a subscriber and again perhaps as a dependent of a spouse. Group policies
have provisions, however, limiting benefits to 100% of expenses covered so there can be no duplication or windfall for the insured covered under more than one group policy.

Because one's health is likely to change over a period of time, a consumer should take a good look at renewal provisions when purchasing health insurance. There are three classifications to consider. Renewal at the option of the insurer is the least desirable alternative from the insureds' point of view. The
insurance company reserves the right to periodically reevaluate the insured in terms of possible deteriorating health and economic conditions in general. The insurer can cancel the policy, raise premiums and insert restrictions as to the future coverage offered.

The second category is the guaranteed renewable policy which prohibits the insurance company from canceling or changing coverage or raising premiums unless the entire class of policy holders is affected. The most lenient renewal provision is the non-cancelable ("non-can") policy which gives the insurance
company no right to make any changes in the consumers' coverage or premiums as long as the policy is kept in effect by the offer of timely payments.

Of course the trick when evaluating insurance is to weigh the cost against the privilege. In this case the more lenient the renewal provisions in a particular policy, the higher the premiums will be. However, the higher cost may well be worth it to a consumer who anticipates failing health because of family history or some other reason and therefore does not want to risk being turned down for coverage in future years or having to pay prohibitive premiums for inadequate coverage.

Basic medical coverage is limited as to the benefits provided and has relatively low policy limits in this age of soaring health care costs. Most people find major medical coverage preferable and almost mnecessary. High limits on benefits are possible by using deductibles, coinsurance provisions and inside
limits to bring the premiums within the range of most consumers. Coupled with stop-loss provisions, the risk of catastrophic illness is adequately eliminated. There are many providers of health insurance but group plans are the most popular. The majority of workers receive some such coverage for their families through their employment. Often premiums are paid by their employer as a fringe benefit of the workplace. You should familiarize yourself with the provisions of government policies such as workman's compensation and Medicare. Make sure you check to see exactly what the renewal provisions are before you buy a particular policy and weigh the benefits to your specific situation against the cost.

Like any insurance policy, money (premium) is paid to the insurer (government) periodically, so that it is available to an employee should he find himself without a job. Like some group health insurance policies, the premium is paid by the employer not the employee (beneficiary) who receives the benefits. The one big difference is that whereas health insurance is an optional fringe benefit provided as a supplement to wages, unemployment insurance is a mandatory
payroll tax in order to fund the program. There are exceptions and modifications to this broad statement.