Are you considering day trading full-time? This thrilling career has many temping aspects and has many things to consider before committing. For one, you’ll need to purchase your health insurance.
Day traders get health insurance like most self-employed people: by purchasing it for themselves. Because they are self-employed entrepreneurs, they don’t receive coverage from an employer. Health insurance costs the average individual $321US / month.
Be sure to factor this into your day trading budget. Read on to discover the details about obtaining health insurance as a day trader and how much you can expect it to cost.
IMPORTANT SIDENOTE: I surveyed 1500+ traders to understand how social trading impacted their trading outcomes. The results shocked my belief system! Read my latest article: ‘Exploring Social Trading: Community, Profit, and Collaboration’ for my in-depth findings through the data collected from this survey!
Table of Contents
Day Trading as a Career
Day trading is a lucrative career that demands a high amount of commitment, attention, and longevity. To make it as a day trader, you need to be independent and self-motivated. You also need to be an entrepreneur, looking after yourself as a self-employed individual.
Being self-employed, you’ll have to take care of everything from your rates and wages to your health insurance. There is no company funding your coverage, so all medical procedure costs will fall on you.
Getting Health Insurance as a Day Trader
Getting health insurance as a day trader is the same as getting health insurance as any self-employed individual. You’ll have to take the initiative to find insurance that works for you or find someone who can do that for you.
Hire a Broker
If you are lost in health coverage, then hiring an insurance broker can provide you with guidance. Insurance brokers are knowledgeable professionals who know dozens’ details, if not hundreds, of health plans. A good insurance broker should break down these plans into simple terms, advising you on which are worthwhile and which should be avoided.
A broker not only works with you to pick the coverage that suits your needs, but they also serve you long-term, updating you on any policy changes, new coverage opportunities, or fee increases. They focus on your insurance so you can continue to focus on the next trade opportunity.
However, hiring an insurance broker is not for everyone. Let’s compare some of the positive and negative aspects of working with a broker.
| Pros | Cons |
|---|---|
| Professional knowledge of insurance plans | Not always experienced in the type of individual coverage you need |
| They can streamline the coverage comparison process | Finding a broker you trust takes time |
| Keeps you up to date on renewals, policy changes, and surcharges | Some brokers push plans that make them more money |
Do Your Research
If you don’t like the idea of hiring a broker to shop for you, then you can find coverage on your own. However, be prepared to do a lot of research. You’ll need to compare the big companies with your smaller, local options, keeping in mind what’s best for you.
Watch out for the fine print that allows companies to increase your rate every year or after every claim. The plans often start cheap to lure you in but quickly inflate to make a profit. You’ll want to balance working with a company small enough to care about you but not so small they are at risk of going under.
Look specifically into insurance companies that have plans for the self-employed. You can find coverage of lost wages due to health issues, and some will even cover living expenses if you cannot work after an accident.
Also, ask about extended coverage for things like massages, therapists, and physical therapists. Day trading can be a very taxing job, and taking care of your health will make you money in the long run by allowing you to stay at work.
Compare Companies
Don’t rush your decision for health insurance. Take the time to compare which companies can provide you with the support and coverage that you need. Here are just a few criteria you may want to consider:
- Do you need an individual or family plan?
- Do you have any pre-existing medical conditions?
- What is your budget?
- Do you partake in any high-risk physical activities?
- Are you a smoker?
- Do you have any allergies or ailments you need ongoing treatment for?
- Does the company have a good reputation?
- Do you know anyone who already uses this company?
- Are you comfortable having this company protect your family?
Consider the Premiums… and the Deductible
Many people are lured into a health insurance company by the low monthly premiums, only to be hit with astounding deductibles when it comes time to use their insurance. The premium is the price that you pay each month to be covered under the insurance plan.
A deductible amount you have to pay out of pocket before your insurance will cover any fees. Most insurance companies have a yearly deductible; this amount can be anywhere from $300 to $2,000 or more!
As a general rule: the higher the monthly premium, the lower the annual deductible, and vice versa.
So, not only do you make monthly payments, but you have to pay a deductible before your insurance kicks in. The fees don’t end there, however. On top of that, you also have to contribute either a copayment or a coinsurance percentage.
A copayment is a fixed dollar value that you have to contribute to your health care costs. Say $50. A coinsurance percentage is a fixed rate of the health care costs that you must pay, 50%, for example.
If you pay your monthly premiums, annual deductible, and copay or coinsurance fees, will your health insurance step up and cover the rest of the costs? That is why it is essential to compare different insurance companies; there are many ways to hide their fees or write their deniable claims into hidden spots in their contracts.
Consider a Short Term Plan
If you suspect that you’re going to need a long time to decide on the right health insurance provider, then you might want to consider electing for a short term insurance plan in the interim.
These plans are geared towards bridging gaps in the timeline of one’s health coverage and satisfying immediate issues that arise while still deciding on your main plan. With short term insurance, you can even “drop coverage with no penalty if a more permanent health insurance option comes along.”
Spousal Coverage
Another way that a lot of day traders get health insurance is through their spouses’ plan. Often, even a minimal coverage plan through a reliable employer will be a better choice than a plan you may buy on your own.
To determine whether a spouse’s plan will provide enough coverage for your family, consider what the cost of a new plan would be: premiums, deductibles, and copay/coinsurance costs are all included.
An employer will frequently give their employees the lowest tier on their insurance plan for free and will offer higher insurance tiers for a nominal fee. It could be worth it for you both to split the cost of elevating your spouse’s plan instead of taking on all of the extended fees of finding new coverage.
Author’s Recommendations: Top Trading and Investment Resources To Consider
Before concluding this article, I wanted to share few trading and investment resources that I have vetted, with the help of 50+ consistently profitable traders, for you. I am confident that you will greatly benefit in your trading journey by considering one or more of these resources.
- Roadmap to Becoming a Consistently Profitable Trader: I surveyed 5000+ traders (and interviewed 50+ profitable traders) to create the best possible step by step trading guide for you. Read my article: ‘7 Proven Steps To Profitable Trading’ to learn about my findings from surveying 5000+ traders, and to learn how these learnings can be leveraged to your advantage.
- Best Broker For Trading Success: I reviewed 15+ brokers and discussed my findings with 50+ consistently profitable traders. Post all that assessment, the best all round broker that our collective minds picked was M1 Finance. If you are looking to open a brokerage account, choose M1 Finance. You just cannot go wrong with it! Click Here To Sign Up for M1 Finance Today!
- Best Trading Courses You Can Take For Free (or at extremely low cost): I reviewed 30+ trading courses to recommend you the best resource, and found Trading Strategies in Emerging Markets Specialization on Coursera to beat every other course on the market. Plus, if you complete this course within 7 days, it will cost you nothing and will be absolutely free! Click Here To Sign Up Today! (If you don’t find this course valuable, you can cancel anytime within the 7 days trial period and pay nothing.)
- Best Passive Investment Platform For Exponential (Potentially) Returns: By enabling passive investments into a Bitcoin ETF, Acorns gives you the best opportunity to make exponential returns on your passive investments. Plus, Acorns is currently offering a $15 bonus for simply singing up to their platform – so that is one opportunity you don’t want to miss! (assuming you are interested in this platform). Click Here To Get $15 Bonus By Signing Up For Acorns Today! (It will take you less than 5 mins to sign up, and it is totally worth it.)
Conclusion
Getting health insurance as a day trader is synonymous with getting health insurance as a self-employed entrepreneur. You will have to take responsibility for your coverage, both through actions and costs.
Working with an insurance broker is a simple way to find suitable coverage. However, finding a broker that you trust is key. You can also search for health plans on your own, but the world of insurance can be tricky to navigate if you aren’t well versed in hidden fees and vetting contracts.
BEFORE YOU GO: Don’t forget to check out my latest article – ‘Exploring Social Trading: Community, Profit, and Collaboration’. I surveyed 1500+ traders to identify the impact social trading can have on your trading performance, and shared all my findings in this article. No matter where you are in your trading journey today, I am confident that you will find this article helpful!
Affiliate Disclosure: We participate in several affiliate programs and may be compensated if you make a purchase using our referral link, at no additional cost to you. You can, however, trust the integrity of our recommendation. Affiliate programs exist even for products that we are not recommending. We only choose to recommend you the products that we actually believe in.
