Health care! I guess we only hear these terms much when we are in the office. "Are you sick? You better get yourself checked with your health care, it will be free!."
These are standard conversations in the office when we talk about getting our self checked by the doctor. Health Insurance, by the term itself is a type of insurance to protect your health! If life insurance is for INCOME REPLACEMENT, health insurance is for INCOME PROTECTION.
For example, person X gets sick, person X does not have health insurance, where would this person get the money? This person have 2 choices.
1. If this person have investments, then the money will be withdrawn from the investment, whether this is a business or in stocks. Withdrawing investments would always hinder it from growth.
2. Worst case scenario - borrow money. Aside from getting sick, the interest from the borrowed money grows everyday. So after getting well, we have another problem. Debt.
"What about if someone donates to person X?" That's good! Question is, will the donation be there all the time?
How do we prevent from number 1 and number 2 from happening? Get a HEALTH INSURANCE!
For a certain amount of money that we pay for this, we are protected at a bigger amount, for example:
A certain Health Insurance is priced at 30, 000 Pesos a year, in return we are protected 150, 000 a year per illness! That's a good value! Let's say person Z gets sick and person Z has health insurance, guess what, person Z do not have to borrow money nor withdraw any investments! The health insurance will cover it. In effect and in real life, this protects our income!
Now I am not saying that health insurances will cover all the sickness, there are Terms and Conditions that applies, to know more about these, you can ask any Insurance company about this. I am merely showing the purpose of a health insurance.
And here is an interesting thing about health insurance, you can only buy it if you do not need it, by the time you need it, it will not be for sale.
Meaning if sickness happens, no health care company would ever sell just to get the person covered. Only when you don't need it, this is available, meaning only if you are healthy.
On my next article, I will talk about the 2 types of Health Insurance, yes, there are 2 types! Please do keep posted or you can subscribe if you wish too. :)
Happy investing!
Picture is not mine, this is taken from http://www.distance-education.org/pics/userpics/Image/health_insurance.jpg.
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