ISG Benefits and Insurance Services Blog
Health insurance is one of those expenses that you wish you didn’t have to pay. However, due to the Affordable Healthcare Act or Obamacare, you have to. People who do not have any insurance must pay a penalty that was ruled as a tax by the SCOTUS.
To be honest, insurance is a good idea because it is a kind of savings which you will draw upon when the unthinkable happens. Here’s how you can lower your insurance premiums by getting group insurance.
How Does Insurance Work?
The easiest way to understand insurance is that the insurer gets money from all the insured and puts it in a common pool. The common pool will be used to pay one of the insured if the harm insured from happens.
For example, if you have an accident insurance it will cover up to a fixed amount in hospital bills. To subscribe to the insurance, you will pay $500 a month. In practice, there will be thousands, if not millions, of people paying the same premium.
The odds that anyone will get into an accident is very low. The odds that all or even half the subscribers will get into an accident is close to zero. Only a small number of insured will ever make a claim. So the insurer still profits on the payments of premiums.
A key metric for keeping insurance inexpensive is the pooling of people. For instance, Young people are at peak health and unlikely to suffer from diseases. Hence their premiums are low. People 65 and above are likely to place claims on their health insurance.
If you want low-cost insurance form a pool of people who are healthy and don’t appear to have health risks. The insurer will check with his underwriter and actuary to determine the risk, it should be low, that the insured will need their insurance shortly.
The premium will be low because the risk is low. The insurer will happily take your money. He will invest it somewhere so that it can grow so it can support you when you actually need it.
As a matter of fact, before the ACA a lot of insurance providers worked out like this. They offered “individual insurance” that was actually group insurance for a larger cohort of people.
At Insurance Savings Group, we do our best in making sure that our clients are well-protected with affordable and comprehensive policies. We make sure to go the extra mile to help you with your needs. To learn more about how we can help you, please contact our agency at (661) 432-1474 or Click Here to request a free quote.
Toll Free: 1-800-220-3304