Temporary health insurance can offer a solution during the current economic downturn. In the insurance business realm, health insurance is a well known territory. However, of late, temporary insurance has started to gain more importance. The reason for this varies. Even so, based on the analysis of most of those considered ‘in the know’ it seems that the present economic climate has played a major role in the growth of people going the ‘temporary’ route.
Much of the economic growth in the pre-recession years was driven by demand, especially with regards to the US markets. This, combined with the real estate and stock market boom, led to the formation of significant economic bubbles. Ultimately, when those speculative bubbles burst it caused a ripple effect on the US economy.
How has the economic downturn affected the insurance industry? Consider the plain and simple fact — the huge bubble of speculation led to increased borrowing. This meant the banks justified high lending figures, based upon highly inflated real estate. When the values of the real estate crashed, both banks AND insurance companies went out of business. This was because they invested a ton of money, which has since disappeared. Therefore, the current economic environment, AKA “the recession”, has left many Americans without health coverage. Over-investment and over-speculation have made it so.
There is another side to this and it is a somewhat double edged sword. Many companies are no longer interested in the health insurance business, because of the skepticism surrounding the economy. Since the US government is currently fighting a simultaneous battle to overhaul the health system, as well as revive the economy, it is not easy to predict what lies ahead. This is why many insurance companies don’t know what modes to follow. In addition, many individuals and companies do not have the finances to provide health coverage for employees. Therefore, there is something of a temporary vacuum at present. In which case, temporary health insurance policies seem the right thing to fill the gap.
Temporary health insurance has lots of potential for lots of people right now, primarily because the costs involved are relatively low. And, most importantly, it provides a decent amount of insurance coverage. The most important advantage of this type of insurance is that it can be relied upon by those who are between jobs, unsure of job security, or have recently graduated. It’s the perfect solution for many, at least until the overall economy recovers.