If you’re an independent contractor, freelancer, or consultant who works on contract for various companies, chances are that you don’t get a standard benefits package from any of your employers. That means you are probably not getting medical insurance as part of your compensation. However, that doesn’t mean you don’t need it. While contracting may be your primary source of income, you can never predict when something might go wrong and prevent you from working for a while. If that were to happen and you do not have medical insurance to fall back on, the consequences could be devastating—and expensive. Here are some reasons why you need to get medical insurance as soon as possible:
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Short-term disability insurance
Short-term disability insurance is a type of insurance that provides you with a portion of your income if you are unable to work due to sickness, injury, or pregnancy. The amount of compensation you receive from your short-term disability insurance will depend on how much you pay for your policy and the terms and conditions of your policy. If you are unable to work for a short period of time due to a health issue, then short-term disability insurance will help you bridge the gap between your primary source of income (contracts) and your living expenses. Short-term disability insurance is especially important if you have a chronic condition that might prevent you from working for an extended period of time.
Long-term disability insurance
Long-term disability insurance helps you replace a portion of your income if you are unable to work due to a disability or injury. If you are unable to work for a substantial amount of time due to an injury or ailment, then long-term disability insurance will help you cover the gap between your primary source of income (contracts) and your living expenses. Long-term disability insurance (LTD) is especially important if you have a chronic condition that might prevent you from working for an extended amount of time.
Risk adjustment factor
When health insurance companies are calculating the rates for their policies, they also factor in the “risk” in insuring you. This is known as the risk adjustment factor. Basically, health insurance companies want to make sure that they take a low risk when insuring you. They want to make sure that they don’t end up paying a lot more than they receive from you. So, they may charge you a higher premium for a policy in order to account for this risk. On the other hand, you may be a low-risk individual and be eligible for a smaller premium. Basically, health insurance companies want to make sure that they take a low risk when insuring you. They want to make sure that they don’t end up paying a lot more than they receive from you. So, they may charge you a higher premium for a policy in order to account for this risk. On the other hand, you may be a low-risk individual and be eligible for a smaller premium.
Conclusion
If you are a contractor or a freelancer, then getting medical insurance is even more crucial. You don’t have the same benefits that are offered by a standard employer. If you don’t get medical insurance, then you are putting yourself at risk for financial hardship. No one wants to think about being sick or injured, but it’s best to be prepared. Medical insurance can protect you and your family from financial ruin in the event of a serious health issue.
