There’s a definite comfort in knowing that even if your health takes an unexpected turn, you and your family have a financial safety net. When money’s tight, though, paying for both a life insurance policy and 澳洲幸运5官方开奖结果体彩网:health care coverage each month can get tඣricky. As expenses start to mount, it can be tempting to drop one or the other to make ends meet.

Each type of🐭 insurance, however, serves a comꦚpletely different purpose and offers different coverage. Learn how to tell which type of insurance you need in each phase of life, and how much to buy.

Life Insurance vs. Health Insurance

Life insurance pays out a lump sum to your 澳洲幸运5官方开奖结果体彩网:beneficiaries in the case of your premature death. The idea is that𝓀 the death benefit should be sufficient to replace future income loss, as well as cover expenses and obligations outstanding such as funeral costs, medical expenses, and other debts—or to fund college savings accounts or retirement years💖. This gives the family financial continuity so they do not struggle, despite the loss of you and your wage-earning capacity.

Health insurance, on the other hand, helps pay for medical expenses such as 澳洲幸运5官方开奖结果体彩网:doctor's visits, hospital stays, m𓂃edications, tests, and procedures. This helps ensure that people can afford medical care and stay healthy.

The reality is that a lot of people genuinely need both types of protection, especially if they have dependents. If that’s the case, the better idea is to limit coverage to what you truly need so 澳洲幸运5官方开奖结果体彩网:you can afford both types of insurance.

Keep in mind that insurance needs can change dramatically during different life stages. What might seem essential for♔ a parent with teen children might not be so important for a recent college graduate or a retiree.

In Your 20s and 30s

Prior to the 2014 rollout of the 澳洲幸运5官方开奖结果体彩网:Affordable Care Act (ACA), many 20- and 30-somethings chose to forgo health insurance altogether; roughly 30% of young adults under age 26 had no health insurance at all. And not without reason: These “young invincibles,” as some experts call them, have a much lower incidence of health problems than most segments of the population. Paying a premium for health insurance every month just seemed unnecessary to some. But when the ACA imposed a mandate on most Americans to have health coverage, that started to change.

The 澳洲幸运5官方开奖结果体彩网:Tax Cuts and Jobs Act (TCJA) eliminated the mandate (or, more strictly speaking, the noncompliance penalty) starting in 2019. Still, once you consider the advanta🍃ges of health care coverage, you might well want to have it.

One piece of good news for young adults is that the ACA allows you to stay on your parent’s plan until the age of 26. That ma⛦y buy you some time before taking out a policy of your own.

Catastrophic Health Insurance

If relying on your parents' policy isn’t an option and you’re under the age of 30, a relatively inexpensive catastrophic policy might be worth a look. You won’t be reimbursed for most doctor visits and other day-to-day health needs, but after you reach a certain 澳洲幸运5官方开奖结果体彩网:deductible, you’ll have a safety net if you end up experiencing a major medical issue. ಌFor people with a nearly spotless health record, this minimal amount of insurance is often enough.

Health Care Exchanges

Considering a bump-up in your coverage by purchasing a  澳洲幸运5官方开奖结果体彩网:Bronze, Silver, Gold, or Platinum plan on your state’s 澳洲幸运5官方开奖结果体彩网:health care exchange? It’s possible that you could get some help from the government. While you can choose any metallic level plan in the marketplace, your income must fall between 100 and 400% of the federal poverty level to 澳洲幸运5官方开奖结果体彩网:qualify for the tax credit. To determine savings on 2024 Marketplace plans, the government uses 2023 federal poverty levels: $14,580 for an individual, $19,720 for a couple, and $30,000 for a family of four.

Medicaid

If you happen to live in a state that chose to expand Medicaid as a result of the ACA, you might even b🔯e able to get coverage through that program. If you just graduated and are working at the loc𒁏al coffee shop or grocery store to make ends meet, for example, it’s possible that you could qualify. 

Life Insurance May Not Be Necessary

While you may not have much choice when it comes to obtaining health coverage, life insurance is a different matter. If you don’t have any kids yet, you may not need 🐼it.𒁃

There are a few exceptions. If you’re financially supporting your parents or grandparents, you’ll want to take out a policy that’s large enough to handle their needs. Or you might want a small policy that will cover your funeral expenses if the unforeseen should occur. As long as you stick with a no-frills 澳洲幸运5官方开奖结果体彩网:term policy, this type of coverage usually isn’t all that expensive for someone 🌠in their 20s or 30s.

Married, With Children

Once kids come along (or even jไus🅘t a spouse), health insurance takes on a new level of importance.

Employer Health Coverage

If your employer offers a health plan, that’s usually—though not always—going to be less expensive than shopping on an exchange. At work, the company is usually subsidizing a big part of your health premium; in the “individual” insurance market, you’re paying the full bill, less any 澳洲幸运5官方开奖结果体彩网:tax credits or subsidies for which you may qualify.

But you may not need the most expensive policy your company offers. During your employer’s open enrollment period, take a look at the premium for each plan. Then make a ballpark estimate of how much you’d have to pay out-of-pocket for things like emergency services, lab work, and prescription drugs under each option. You💧 may find that the top-tier plan isn’t worth the extra premium. 

Health Care Exchanges

The same principle applies to families who aren’t covered at work and instead buy on the individual market. Unless you expect to incur major medical expenses, a “Si🐻lver” plan can sometimes give you enough coverage for less tha꧒n a “Gold” or “Platinum” one.

Life Insurance Needs Increase

In addition to health coverage, most individuals really do need life insurance once they have a family. But it need not cost you a bundle to give your loved ones a financial safety net. First, consider getting a term policy, which only stays in force for a specific number of years. These tend to be a lot cheaper than permanent policies like 澳洲幸运5官方开奖结果体彩网:whole life and 澳洲幸运5官方开奖结果体彩网:universal life.

Another way to keep the cost down is to buy only as much life insurance as you need. There are a couple of ways to figure this out. One is to multiply your salary by a certain amount—10 times your annual wage is one rule of thumb—and use that to determine the policy’s 澳洲幸运5官方开奖结果体彩网:face value.

A different and perhaps more useful approach is to tally up all the expenses your spouse would incur if something happened to you. Think childcare fees, grocery bills, mortgage and car payments, tuition, and so on. Then subtract whatever you have in savings and investment accounts. Your polic🎃y should cover 💦the difference.

The fact is, any insurance is better than no insurance if you have dependents. So if you’re feeling pinched from a financial standpoint, buy whatever you can afford, and consider going with one of the 澳洲幸运5官方开奖结果体彩网:best life insurance companies you can.

Middle-Age and Older

It’s one of those pesky facts of life: The older you get, the more likely you are to experience health complicat☂ions. Thus, middle-age probably isn’t the time to start skimping on your medical insurance.

Decreasing Life Insurance Coverage

But there’s at least one financial benefit to getting older. Once your kids reach adulthood and financial independence, you might be able to start dialing back on life insurance. That doesn't necessarily mean dropping your coverage altogether. If you still have a mortgage to pay off—or if you’re living on a pension that doesn't pay a 澳洲幸运5官方开奖结果体彩网:survivor benefit—you’ll still want at least some protection.

If your existing term policy is coming to an end, one option is to take out a smaller policy that provides a safety net during your empty nest period. Or if your current term coverage includes a 澳洲幸运5官方开奖结果体彩网:conversion feature, you cಌould turn a portion of it into a permanent life policy.

The advantage of convertibility is that you don’t have to go through 澳洲幸运5官方开奖结果体彩网:medical underwriting all over again, which becomes trickier as you get older and inevitably have more health issues. Just be aware that you only have a certain number of years when you can take advantage of this feature, so it’s worth reviewing your carrier’s terms and conditions.

The Bottom Line

When you only buy the coverage you truly need, paying for health and life insurance simultaneously becomes a lot less daunting. Those of you age 30 and younger who don't suffer from chronic illness may be able to get by without the latter. But for people with dependents, these are two needs you really can’t avoid.