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Insurance Is for Uncertainties – Not Old Age

April 15, 2011

People who are entering the “autumn of life” and who have medical policies sometimes make inquiries as to how much help they should get from their insurance to overcome conditions typical of that period of their lives.

Unfortunately, most insurers will not provide any assistance at all for this. Menopause, climacteric and osteoporosis are often specifically excluded per the terms of the insurance contract. Why? The reason goes back to one of the fundamentals of insurance: Insurance is to cover uncertainties. If you buy auto insurance, it’s because you may have a smash, or your car may be stolen. If you buy a fire and natural disaster policy for your house, it’s because it may burn, or may be damaged in a quake or flood. If you buy a medical or health policy, it’s because you may have an accident or become ill. All those “mays” denote uncertainty.

But old age is a certainty – unless of course someone has a fearful accident or sickness and goes to reside with the morning stars at an early age – and therefore old age and the conditions that go with it are not something that insurance companies will usually cover.

Another angle: Medical or health policies are to cover medical expenses due to accident or sickness – and childbirth. But old age is a condition, not an accident, ailment or illness, and so are the conditions that frequently come hand in hand with the aging of the human body: menopause, climacteric, osteoporosis, wrinkles, loss of hair, age spots, etc. So these conditions are normally excluded from the coverage of most medical or health insurance policies.

As my brighter readers will no doubt be getting ready to point out, the exception to this uncertainty business is life insurance. (This is a terrible misnomer; it should be called death insurance!) Death – physical death, at least – is not an uncertainty, it’s something absolutely certain, no “may” about it! So why is there life insurance; why do insurance companies engage in that? The answer is that life insurance is really a financial investment plan with a clause for early retirement of funds in certain circumstances, and all that is being insured – the uncertainty – is the moment when the retirement of funds is going to happen.

So, dear reader, don’t count on your medical policy to counteract the effects of aging. Take your multivitamins, keep active, keep smiling, be positive, and expunge from your mind the compulsion to shoot your insurance adviser.

The opinions and viewpoints expressed are those of the writer. Our purpose is to give the reader a better understanding of insurance in Costa Rica. For more information, contact David Garrett at 2233-9520 or [email protected].

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