Personal Finance

Newbie here looking for an insurance plan. Any recommendations?

  • Last Updated:
  • Feb 9th, 2021 9:49 am
Newbie
Nov 25, 2019
36 posts
6 upvotes

Newbie here looking for an insurance plan. Any recommendations?

Hey,

First off, I apologize if this is the wrong section, as I wasn't sure if there's a more fitting section.

I've been going through some pretty bad mental health issues lately and I'm looking to purchase counselling / mental help services from a therapist. That being said, I've never bought insurance before. Other than knowing big names like SunLife and ManuLife, I don't really know much else about the industry, best practices, or how it works. I'm self-employed and so I don't have employer-provided insurance either.

I realize that sessions can be "covered" by insurance...problem is, I'm clueless as to how this works. I was thinking maybe I can purchase some sort of insurance plan and use that towards the mental help sessions, right? Instead of shelling out, say, $120 per session out of pocket (as I don't have that kind of money, unfortunately).

So essentially, am I looking at shopping around for an insurance plan (let's say from SunLife or ManuLife), signing up for the plan, and then getting reimbursed every time I purchase a mental help session? Is that the idea?

I was wondering if anybody could help point me in some direction with this, as I'm pretty embarrassed that I haven't taken the time earlier to be more proactive about this aspect of my life.

Thank-you so much in advance!
4 replies
Deal Addict
Oct 24, 2010
2985 posts
3186 upvotes
Ottawa
I don't know too much about private health insurance, but there are typically annual maxmimus for practitioners like therapists. You're typically covered 80% to a maximum of $300-$500/year.

So for a $100 session, you pay $20 and insurance pays $80. And you have a maximum of 4-6 of those covered sessions per year before maxing the dollar value.

The plans themselves can be $200-$300/month, so $2400-$3600/year.

So, unless you're using the plan's other benefits, it's likely not worth it strictly for therapy.

Keep all receipts, regardless of what you do. The insurance premiums are valid medical expenses for tax purposes; as are many mental health services. You need to hit a minimum threshold of expenses (3% of income or $2397, whichever is lower), but you'll likely hit that pretty quickly with regular therapy sessions and/or insurance premiums.
Deal Fanatic
Jan 21, 2018
9652 posts
10924 upvotes
Vancouver
The problem with your plan is that the insurance industry is not a charity. Their goal is to collect at least 50% more from you than they pay out. They will not enter into any insurance agreement where it looks like they will not be profitable.

They will not offer group insurance to individuals or to companies with less than 4 members, only higher individual rates.

If you are an unknown new client, they will limit the size and number of claims you make in the first few years, and impose high deductibles. If you go over their profitability limit, they will raise your rate steeply the next year to get their money back.

If you are a new client not transferring from a recent group health plan, they will give you a detailed questionnaire about your medical and life history, and about pre-existing conditions (including mental health issues). If you refuse to answer, they will refuse insurance. If you answer dishonestly, they will take your money, keep your answers on file, then pull them when you make a claim and check for any misstatements as reason to deny your claim.

This is not harsh treatment, it's just common sense for companies that are in business to make money. Unfortunately it means that you are not likely to see any benefit from trying to use new insurance to pay for a therapist.

You are much better off if you have any existing insurance under which you could make a claim, especially if you are part of a large group where your claims will not make any significant dent in the group profitability to the insurance company.

Failing that, you could try your provincial health plan. They are generally resistant to paying for therapy unless there is a clear recommendation from your doctor, but you could try.
Deal Fanatic
Jul 1, 2007
8569 posts
1763 upvotes
What you're looking for isn't insurance. Insurance is generally something you pay into when times are good so that you get coverage for when times are not good, whether that health, death, crashing your car, home burning down, etc. What you're asking for is whether someone will insure your home that's already on fire. What you should be asking is whether there are government supports to help you rebuild it.

Maybe there is some program in whichever province you live in to help you cover those therapy costs, based on your income or whatnot. Sites like this (or equivalent if you're not in Ontario) might be a good place to start: https://www.ontario.ca/page/find-mental-health-support
Money Smarts Blog wrote: I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
Deal Fanatic
Jan 21, 2018
9652 posts
10924 upvotes
Vancouver
Thalo wrote: What you're looking for isn't insurance. Insurance is generally something you pay into when times are good so that you get coverage for when times are not good, whether that health, death, crashing your car, home burning down, etc.
It's probably better not to think of insurance as something you invest in, or that covers your routine costs. Those are actually money losers that don't make sense. Better to think of it in terms of your examples, i.e., coverage for unusual events by pooling your risks with a bunch of other people to reduce the average cost to something lower and more stable. Either way, you're still paying that extra 50% over expected costs for the insurer's admin and profits, so it better be worth it.

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