Calculating health insurance costs wisely, can be one of the best financial decisions you make in life. Uncertainty in many aspects of life actually reinforces the reason for the need for health protection.
So it’s no longer a matter of need or not, but how in the midst of uncertainty we can still have health protection.
The saying “man wills, but God is also the one who determines” seems to be a picture of what happened during a pandemic. Yes, what a plan, Pandemic is the biggest plot twist of the century.
This pandemic not only makes us need to continue to be vigilant and have a strategy to make every effort to avoid virus attacks.
The pandemic has also made us (again) aware of the high cost of health and the importance of managing finances carefully to ensure protection for ourselves and our families.
This Pandemic incident is the right time to review your family’s financial condition. This is the time to do financial planning that is not only able to achieve financial goals but also safe from ‘shocks’.
Financial Planning in the Midst of Uncertainty
Nobody knows what will happen tomorrow. And whatever we do always has a risk that has the potential to present problems that we cannot foresee.
All we can do is prepare ourselves for what might happen by planning as best we can, including financial planning.
Financial planning is important to do to achieve your financial goals. But during this pandemic, it’s a good idea to evaluate existing financial planning and then rearrange it by paying attention to the uncertainties that occur during a pandemic.
It needs to be recognized, even though income tends to be stagnant, the extra expenses that occur from rising prices for staples and health costs will greatly affect your financial condition.
What can you do to evaluate and plan finances during a pandemic? Basically financial planning consists of these five steps:
- Managing finances: the main principle is managing the fulfillment of daily expenses (food, transportation, electricity, water, etc.) by paying attention to income, considering debt, and ensuring a stable cash flow.
- Building a safety net: the focus is on ensuring the existence of an emergency fund, increasing savings, and choosing adequate insurance coverage, both life insurance and health insurance.
- Increase assets: the main principle is to grow your investment portfolio to meet your financial goals and ensure sufficient retirement funds for old age.
- Safeguard assets: the main goal is to achieve financial freedom, which is to have sufficient funds until old age, without having to burden the generations below you.
- Inheritance: at this stage, the focus is on ensuring a heritable asset.
The role and types of health insurance
Financial planning is actually a process that is carried out continuously, rolling and adapted to the changing needs of yourself and your family.
From being single, getting married, having children, and when children go to school, of course, financial needs are constantly changing.
On that journey, the risk of life is always lurking; from accidents, illness, even (God forbid) the loss of a source of income because the breadwinner of the family died.
To anticipate these various possibilities, we recognize the term risk management in the form of protection planning, which can be life insurance, accident insurance, health or general loss insurance. If your funds are limited, what matters is health protection and life protection.
Health insurance is needed to protect the assets you already have, when there is a need for health-related expenses.
Moreover, health costs during this pandemic have increased because there are costs that need to be incurred for the Pandemic protocol.
You don’t want the savings you have collected to continue to decrease because you have to pay for medical expenses, surgery, or hospitalization yourself?
Well, health insurance helps manage the risk of financial loss due to illness. Broadly speaking, there are four principles of health insurance.
First, the risk of individual illness is borne by the group. Second, changing from a situation of uncertainty to obtaining definite benefits.
Third, pay premiums in small amounts while compensation is received in large amounts. Fourth, protect participants from economic risks if they are sick.
When viewed from the types of benefits, health insurance itself consists of two. First, health insurance that provides reimbursement for hospitalization or outpatient care (treatment). Second, health insurance that provides daily cash benefits.
In the second option, reimbursement is given in the amount agreed at the beginning or according to the policy, without taking into account the actual costs that you incur. While in the second option, reimbursement can be made in full or not in full, adjusting the health bill.
The presence of BPJS Health since 2014 is of course very helpful in ensuring health facility guarantees. Even though it is quite adequate, if your budget allows it, it would be better if it is also equipped with health insurance that is adjusted to your health risk profile.
So when choosing health insurance, make sure it can provide cost protection for diseases that suit your lifestyle and family medical history.
Meet the cost of health insurance
Then how can you meet the required health insurance costs? First, make sure in advance the health protection needs that you and your family need.
Everyone has a different physical condition, lifestyle and medical history. If indeed you have quite a lot of funds, there is nothing wrong with choosing broader health protection with a more comprehensive guarantee.
Meanwhile, if the available funds are quite limited, you can choose according to the health risk factors that you have.
After that, also consider the ability to pay insurance premiums. Make sure the premiums to be paid will not become a financial burden.
Ideally, the maximum limit for BPJS Health contribution funds and health insurance that you spend per month is 5 percent of total expenses.
So, apart from setting aside funds to pay for health insurance, make sure you can still pay premiums and also set aside money for savings and investment.
So what if the office where you work provides health insurance? There are several things you need to consider to determine whether you need additional health insurance.
For example, check whether the health benefit ceiling from the insurance meets your needs. What diseases are covered? How are the exceptions?
Also check how the services of the health insurance provider are as well as the number of family members covered.
Choose the best health insurance
Choosing health insurance that suits your financial condition is of course the ideal step. But also make sure that the insurance suits your needs.
Don’t be oriented towards a cheap nominal premium. It is better to prioritize the benefits provided by the ease of the claim process.
That way, the insurance will be useful in an emergency and not add to the difficulties due to a complicated and convoluted claim mechanism.
In the end, even good planning can lead to ‘sour’. No one can predict the path of our life, that’s why there needs to be a strategy to deal with the uncertainties that lie ahead. Insurance is part of the planning that we can do to protect the assets we have.
Like a house, insurance can be the foundation that ensures you reach your financial goals. Without a strong foundation, your financial growth will be vulnerable to collapse. So, plan well, OK?