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Monday, August 24, 2009

Reduce Your Health Insurance Premiums for Individuals and Small Businesses


You were having a nice day. Then you got a notice that your individual health insurance rates had just been increased - a lot! You cannot believe that the insurance company expects you to fork over 20 to 40% more for your monthly premium next year. Will you have to take the drastic risk of going without health insurance?

Or maybe you're a small business owner who is trying to do the right thing for your employees. Your agent just called to tell you that since one of your employees just had surgery, the rates for everybody in your entire business would be increased by a double digit percentage. You want to do the right thing for your employees, but this increase might mean you have to lay somebody off or drastically slash everybody's benefits.

What can you do?

Of course, the easiest thing you can do to cut your premium is to increase your deductible, reduce your benefits, or shoulder a higher copay amount. The less risk that the health insurance company incurs, the less they will charge you. However once you take that step, you may not be able to replace your old benefit level without incurring additional underwriting. Also, if you do get sick or have a serious accident, you may not have saved any money at all in the long run!

Is there an antidote for high health insurance premiums?

Well, of course, I have a couple of suggestions. You might consider raising your deductible and adding an accident and illness indemnity plan. A few thousand dollars in case of a fracture, or several thousand dollars in case of a serious illness can pay deductibles, and help you to meet expenses while you're not working. The sorts of plans are usually inexpensive anyway. Some companies will guarantee rates for a longer period for insurance plans with high deductibles or specified benefits.

One other benefit you may reconsider are doctor copays. Sometimes this option can raise your premium by 25%, and if you only go to the doctor twice a year, it really doesn't save you any money. Determine what the copay option really covers - just the doctor, or the doctor and lab tests. Many just cover the doctor visits, and lab work is extra anyway.

What if you don't want to cut your benefits?

If you don't want to cut benefits, consider shopping around. It is so easy to compare insurance companies and get quotes these days. A few minutes in front of your computer screen should give you a very good idea of available options.

When you buy health insurance, you look at price and benefits. When an insurance company looks at you, they consider your health, age, and even your credit score! Different companies have different standards, and you may be able to find comparable coverage for less money. When you do shop, make sure you do your research, are aware of pre-existing conditions, and consult some qualified agents. Health Insurance Agents should be aware of different company policies, and they should lead you in the right direction.

Insurance and Risk Management for Small Business Owners

Many small business owners truly believe that when they have a proper and comprehensive insurance
program for their business, they will be ?fully protected? from financial losses. Setting aside the
grey areas on the fine print of most insurance policies, there are many losses that insurance cannot
be extended.

Some of the such losses that small business suffered after occurrence of accident; are lost of goodwill to customers due to failure to deliver merchandises on time; lost of faith from employees for not
providing a conducive working environment, and many more losses which do not have financial impact
initially but gradually translate into financially losses.

While insurance is important in indemnifying small business owners in case of fire damaging their
properties and/or accidents that causing injuries and loss of life thus downtime in productivity,
small business owners should practice risk management in order to create a more sustainable business
and have a competitive edge over their competitors to minimize their lost time hence cost.

The basic methods of risk management are

1.Avoidance of Risk

Simple procedures and things that most small business owners took for granted can have huge impact
when they resulted in accident. Always practice the maxim of ?prevention is better than cure.?

2.Reduction of risk and losses

Be aware of the consequences of risk and accident, develop a loss prevention or reduction system to
minimize the occurrence of risk and losses when risk happened.

3.Transferring of Risk

Transfer the risk to other parties like insurance company.

4.Keeping of risk and absorption of losses.

If transfer of risk is not possible, you may have to absorb some of the risk and/or losses. Some of
the insurance policies require the insured to bear a portion of the losses term as deductible or

Arranging a comprehensive insurance cover for small business is crucial for the survival, many small
businesses have overlooked or ignored the important of a proper coverage for their business, when
accident happens, they found themselves in a financial distress and thus loosing their customers to
their competitors.

It is thus advisable to seek professional advice for a proper insurance coverage and more importantly practice good risk management.

SK Wong is a Charter Marketer with a MBA in Finance. He surrently provides Marketing and Risk Management trainings and services to his local business community.