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Health Insurance Suggestion - self insure vs. HI, not in the US.
Old 03-02-2012, 12:21 PM   #1
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Join Date: May 2005
Posts: 188
Health Insurance Suggestion - self insure vs. HI, not in the US.

Where I live, the health insurance concept is little different, it is more like catastrophic insurance. Insurance only pays for hospital only after minimum time of admittance, there is a limit on total amount, and various limits on different things like room rent etc.. There is some pre and post hospitalization benefit also. The medical services rates are same or more if insurance pays compared to if paid in cash/equivalent. Also once insured for certain period then the HI can not be declined for any medical reason and insurance company can be changed.

The going rate for family is 3% of insured amount for a family of 4 with eldest around 40 yrs, going up to 12% for 65+ age, amount limit is for full family not individual.

So is it better to self insure? One can put the insurance amount in CD/bonds and let it grow separately, just to take care of health expenses. Tax free rates are around 6% but may go down in future, interest rate can be locked for next 7-8 years. Or the other option, to get HI from an ins. company, rates will go up with age but it is renewable, there may be 20-30% surcharge after a claim.

There is third option also, HI insurance with very high deductible. For example insurance amount is X but deductible is also around X, either spend X from some other HI or from pocket then the ins. company will pay. Insurance rate are typically 1/3 to 1/4 of normal HI (with no deductibles) rates.

And finally there is tax deduction to certain limit. if my income is above certain limit then 30% tax saving on premium. I guess this is becoming really very complicated and answer can change since there are so many variables, all suggestions are welcome.
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