Personal Finance Essentials
Policies to Avoid
Health Insurance > Policies to Avoid
Not all health insurance products are worth your money.
Some are marketed heavily but provide far less protection than a real health insurance policy.
Here are two types to avoid.
Accident Insurance
Accident insurance pays a set dollar amount for every day you’re hospitalized – but only if you’re there because of an injury, not an illness. That limitation is the core problem. You want a policy that pays benefits regardless of why you need treatment. On top of that, the premiums for these policies tend to be high relative to what they actually cover. Buying accident insurance is essentially a bet that you’ll never get sick – and that’s a bet not worth making.
Dread Disease Insurance
Dread disease policies pay out only if you’re diagnosed with a specific illness – cancer being the most common example. The appeal is understandable: a serious diagnosis comes with serious costs. But the limitation is the same problem as accident insurance. If you become sick from something not on the policy’s approved list, you receive nothing. You want coverage that pays for any cause, not a narrow selection of approved conditions.