Health Insurance Lingo: Premiums

Health Insurance Lingo: Premiums

1000 667 Syed Hussain

Between a deductible you may or may not reach, copays for an unpredictable number of doctors’ appointments or prescriptions and other out-of-pocket expenses, it’s nearly impossible to tell exactly how much you’ll actually pay for health care in a given year. But there’s one cost you’ll always see coming — your monthly health insurance premium.

An insurance premium is just another way of saying your monthly bill. It’s similar to your rent: You might have to pay other bills to keep the lights on and your water running, and you might pay different amounts each month depending on how much energy or water you use. No matter what, though, your rent stays the same every month (at least until your lease is up). And just as your rent is what lets you stay in your apartment, your premium is what lets you stay in your health plan.

So, how do you actually pay your premium? If your health plan comes through your employer, then your monthly premium is usually deducted from your paycheck automatically, making it one less thing to worry about. If you purchased your plan on your own, then you’ll pay your insurance company directly each month. You can also set up a direct deposit for your monthly premium, so your bill is paid automatically from your checking account. Why stress about remembering to pay your bill if you don’t have to?

A lot of things are difficult to predict, including health care costs. Your monthly premium, though, won’t change on you — and when you’re trying to wrangle your finances, even one consistent expense can make budgeting that much easier.

Syed Hussain

Syed Hussain is a blogger and freelancer specializing in personal finance, millennial issues and healthcare. He especially makes personal finance simple and easy to understand for college students and young professionals.

All stories by:Syed Hussain

Syed Hussain

Syed Hussain is a blogger and freelancer specializing in personal finance, millennial issues and healthcare. He especially makes personal finance simple and easy to understand for college students and young professionals.

All stories by:Syed Hussain