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Pay your health insurance deductible with someone else's money

When you buy an insurance policy, you buy a company's promise to pay in the event that something happens. Many of these policies come with deductibles. You might have $1,000 deductible for your auto or homeowner's insurance, which is what you have to pay before any coverage kicks in. Well, your health insurance policy is like that. Under the Patient Protection and Affordable Care Act, better known as Obamacare, your policy has either a single deductible or a family deductible, if more than one person is covered under the policy.

This deductible, however, is not $1,000, or $2,500, as in the past. A typical Silver Plan family deductible is $12,700, which must be paid prior to any insurance coverage. Many of you received government subsidies - over 237,000 in Michigan - to help pay premiums. That's the "affordable" part of Obamacare. What may not be so affordable is that deductible. Imagine someone in your family suffers a stroke. A few days in the hospital can run up some pretty hefty charges; fortunately, your insurance covers the bulk of them. Unfortunately, you have to come up with the first $12,700, and for many of you, that may not be possible.

But there is an insurance solution, in the form of supplemental insurance. Supplemental insurance, such as critical illness insurance, is intended to fill in the gaps that traditional insurance doesn't cover. These policies provide cash to an insured - not to the doctor or hospital - and can be used to offset deductibles, or for anything else needed. For example, a 30-year old non-smoking male can purchase $15,000, which is more than enough to pay deductibles and any ancillary costs, for $128.00. Per year! That's $10.28 per month or 34 cents per day! To look at this from another perspective, if you paid this cost every year, it would take nearly 100 years for you to reach $12,700!

What illnesses are covered? Such illnesses as invasive cancer, stroke, heart attack, kidney failure, severe burns, and loss of sight, are just some of the illnesses covered. And remember, after your health policy deductible is paid, your policy coverage kicks in, so you don't need to buy a critical illness policy for $50,000, for example, unless you want to. Now obviously, the younger you are, the less it costs. For a 45-year old male, the premium is $308.70 per year, which is still less than $1 per day. So what makes more sense? Paying $12,700 out of your own pocket, or paying a few hundred dollars a year, and letting someone else foot the bill?

There are also accident-only plans available, which work the same way, but for things like broken bones, head injuries, severe lacerations, etc., occurring in accidents. If you have children, even something as minor as a cut and stitches won't be covered until your deductible is paid. Ask yourself: what is the most efficient use of my money? Even if you never need it, the peace of mind of knowing that you'll never have to write a huge check to a hospital or doctor is tremendous. It's always better to use someone else's money.

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