What Is The Most Important Insurance For A Young Professional?

tim-ravenYesterday, I was asked to join the Houston Young Professional organization.  I took a look at their You Tube video.  It became instantly obvious to me that I would not fit in that organization.

Please don’t get me wrong.  I have no reason to suspect that there is any problem with HYP.  In fact, I would like to see more organizations formed to help young adults to reach a level of success in their chosen fields.

My only objection is that I am too old for HYP.  I know that their by-laws will not have any problems with someone who has already experienced his 50th birthday.  However, I would probably be uncomfortable being surrounded by young people who are younger than my children.  I would constantly be afraid that I would inhibit them or worse.  I hate being called Sir or Mr. Barnes.

I know that when a younger person calls me that, they are merely showing respect.  However, I hear it as a reminder that I am getting older. 😦

I told the individual who invited me that I would be happy to serve as a mentor to any young professionals who feel they could benefit from my experience and advice.  However, I would not be able to take an active part in meetings or networking gatherings.  I would feel like I am constantly being looked at as a chaperone at a school dance.  That is not what I want to be at this time in my life.

The invitation did remind me of something that people tend to forget.  While I am not a fan of  Mr. Obama and his supporters, they have been able to keep the nation talking about health insurance.

On one hand, that is a good thing.  However, on the other hand, the national conversation about health insurance has allowed many Americans to forget some of the important lessons about insurance that our grandfathers, and in this case great-grandfathers learned in the early part of the last century.

In this post I want to try to remind Americans that the plans in Obamacare only solve a part of the problem if a young adult gets sick and has to miss work for an extended period of time.

Yes, the Essential Benefit plans with Obamacare will pay help pay the bills from doctors, hospitals and other support members of the health care industry.  However, not one of the Obamacare plans will help pay to put groceries on the table or protect you from being evicted or having your car repossessed because you are not able to go to work and earn a paycheck.

Some Americans point at Social Security Disability as being a safety net if they get hurt and are unable to work.  Unfortunately, that is only true for some Americans.  For most, Social Security Disability Income is too little, too late.

It cannot be relied on for two reasons.

  1. SSDI does not pay anything until after you have been unable to work for at least 6 months.  Until then, you are at the mercy of your personal savings, personal Disability Income insurance plan or charities to pay for your living expenses.  Your mandated “Health Insurance” will not help you.
  2. Less than 40% of SSDI claims are approved the first time they are considered.  The majority of Disability claims submitted to Social Security must go through the review process.  That process can take as long as 3 years.  Although SSDI will pay you, retroactive to a date 6 months after your illness or injury, you will need to survive on your personal savings, personal Disability Income insurance plans or the charity of your friends or community.

Yes, medical bills are expensive.  They can derail any financial plans you have made for your future.  Whether it is right or wrong, I think it is wrong, the majority of our elected officials have mandated that all Americans buy insurance to make certain that the bills from doctors and hospitals get paid.

However, those politicians have left it optional if you want to buy insurance to maintain your standard of living while you are increasing the standard of living for doctors and hospital administrator if you suffer a major illness or injury that prevents you from earning a living.

If you have neither adequate savings or Disability Income insurance, while you are watching your home and car go up for auction because you are not able to earn enough money to make the payments, you can rest assured that since you purchased mandated Obamacare insurance, your doctor will not miss a payment on his vacation home.

You suffered through this article hoping to get an answer to the question, “What is the most important insurance for a young professional?”  In my opinion, the mandated Essential Benefit plans under Obamacare are important, but for a young adult, who has not been able to save 6 months worth of income, or more, in a Rainy Day fund, Disability Income insurance is even more important.

If your employer does not offer Disability Income insurance as part of your benefit package, and you do not have enough money in your Rainy Day fund, consider buying Disability Income insurance either directly or as part of a voluntary plan through work.

It is surprising what we remember.  I can not tell you who presided over my first training class in insurance, 27 years ago.  However, I cannot forget this question.