All of us are being urged to become more personally responsible for our community, our environment, our health and our finances. As the state cuts down on what it does, in some of those areas we have little choice.
On insurance, it makes sense to buy covers that will be cost efficient. None of us can afford to buy all the insurances that we think we should have, and certainly not all the insurances that companies try to sell us.
If you find insurance confusing, you are not alone. I have been in and written about insurance for many more years than I will admit, and despite having professional qualifications and lots of experience, some insurance companies continue to offer products that are so complex that they confuse even me - so what hope does the average intelligent customer have? Insurers excuse is that you should uses a specialist advisor who will understand all the complexity, but this is rubbish as while you buy a new car via a dealer you will still not buy one that is too confusing or complicated to drive. There are government and insurance regulator initiatives to promote more simple products- but as on bank bonuses- government and regulators can do little if the organizations they are pushing behave like a stubborn mule in a bad mood.
Some insurers do offer products that any customer can easily understand, although they suffer from industry complaints that everything must be complicated so that every possible need can be met – I shudder to think what cars or houses would look like if designed by insurance companies.
Offering a shining light among the gloom are health cash policies, which pay for everyday health treatments like the dentist, optician, and physiotherapist- and often a wide range of effective alternative therapies that the NHS tends to disparage. As the NHS will certainly expect each of us to pay more of a share for everyday non-emergency treatment, health cash policies are very useful. They are easy to understand and use as the money goes to insurers each month, and when you claim, they pay within a few days.
Health cash fits neatly into the modern mood for personal responsibility and they are inexpensive too. Employers are unlikely to pay high annual salary increases in the current climate, but many do want to reward loyal hard working employees. So low cost benefits are increasingly popular.
Employers can arrange health cash plans in three ways; where all the premium (discounted as it is taken out of salary and so cuts the costs for the insurer) is paid by the employee; where all the premium is paid by the employer- or an increasingly popular one, where both share the premium.
Health cash plans can cover the employee and their partner and children, often including students. As for every treatment taken, the employee has to pay upfront and get the cash back from the insurer, it is harder to abuse than insurances that pay direct. Also, there are either single use or annual limits for each treatment and sometimes they will only pay for 75 or 80% of the cost. So every employee has an incentive to use the cover wisely but not abuse it; real personal responsibility.
Employer arranged cash plans were one of the few health insurance success stories of 2010 and look to be so in 2011.If your employer does not offer you one, ask them why not?
As every business professional knows, a workforce that looks after its health is likely to be more motivated and ultimately more productive, with fewer working days lost. Health cash insurers can work with employers to offer off the peg or bespoke health cash schemes that can include many benefits for employees.
Health cash plans: Hot topic: February 2011