Self-Insurance: Alternative Way to Insure Yourself

If the insurance premiums are getting too high for your current budget, why not try self-insurance. Self-insurance is nothing different than saving some money for times when you need them, but you will also be investing the money on short-term investment options — such as money market or liquid assets — and use the money when you need things usually covered by insurance policies. With the right plan, self-insurance can reduce the amount of premiums you would have to pay or eliminate them completely.

For things such as car repairs or gear maintenance, you don’t really need the extended warranty or insurance policy. All you have to do is take the money you allocated for those insurance premiums and use it as starting capitals for self-insurance. You can create an investment managed account and invest your money accordingly. When you need to pay for repairs or other costs, you can simply withdraw the money and cover the repair costs yourself.

When you saved enough money on self-insurance, you can also cut the insurance premium for your health plan. Simply go with the emergency health insurance — this type of insurance only kicks in after a certain amount of deductable, but the premiums for large coverage are substantially lower. When you need to go see the doctor or other minor medical activities, you can simply pay using the self-insurance. When you face an emergency, you can use the emergency health insurance to help you. This way, you still enjoy maximum coverage without spending too much money on insurance premiums.