To insure or not to insure?

Dear Dr. Gott: I have a 6-year-old daughter. In the past, I decided not to have health insurance for her or myself. This is because we eat healthy and exercise. When we get sick, we eat even healthier and drink lots of tea and get lots of rest instead of going to the doctor. However, she is at the age where I worry about her breaking an arm or injuring her teeth or something. I don’t want to pay $350 a month and up for full coverage when I will use only the accident portion of the coverage. I know they offer accident-only coverage. Do you think this is a good idea and do you know which ones are good? Or am I better off putting $200 a month into a savings account in case she has an accident?
Dear Reader: I personally know a number of people who “self-insure,” meaning that they put a specific dollar amount away each week or month in case of an accident. They have been doing it successfully for many years. However, coupled with this practice is the knowledge that they are reasonably well off and can cover a minor catastrophe should it strike. If you are in that category, this is worth considering.
Some schools have accident-insurance programs available for a minimal amount of money. The cost is in the vicinity of $50 each school year. They can offer the bargain price because they work on the odds of most children remaining accident-free, owing to close supervision; however, should a child fall from a play gym and break an arm or loosen an adult tooth, he or she would have the coverage. This, too, is an option.
While $200 a month is a lot to put aside, it adds up to only $2,400 a year at a time when she can be playing kickball with other children, chasing someone across a piece of equipment at the local park or dashing into the street for a ball when a car is coming. Accidents do happen, and they’re expensive. One catastrophe (and they never come at a good time) can wipe out several years worth of savings. But, that said, the money in the bank is far better than no fallback at all.
If you can handle the lesser issues, there is catastrophic insurance coverage offered with relatively low premiums. For example, you might have a policy that picks up 100 percent of her expenses after you are out of pocket $2,500 or $5,000. Maybe a combination of the $200 monthly savings and a catastrophic plan is appropriate.
Keep in mind that we don’t know what will happen tomorrow, next week or beyond that. Even if you read your horoscope, get up on the right side of the bed, eat well, exercise, and think your crystal ball has all the answers, accidents and sickness can strike. It’s difficult to be prepared and more difficult not to be. So my answer is to comparison shop for rates. Begin with your computer or local phone directory. Jot down the names of three or four well-known insurance companies. Call them, and explain your situation. Ask for rates. There is no commitment, so don’t feel any pressure from anyone on the other end of the line. Some companies may have better ideas and new affordable packages. Ask about deductibles, noncovered illness, pre-existing conditions, immunization, dental coverage and anything else that comes to mind.
Had you begun when your daughter was born, you would have about $14,400 in that savings account. Good luck.

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