What percentage of your gross income should go towards health insurance?

UPDATED: Jun 28, 2011

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UPDATED: Jun 28, 2011Fact Checked

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Asked June 28, 2011

1 Answer

There is no cut and dry answer to this question. In practical terms, you should not pay more for health insurance than you must, but it is important that you are purchasing sufficient coverage to protect your health and the health of those who are dependent on you. This might be 3 percent of your income, or 25 percent, depending on a number of factors including the health of those insured on the policy, the number of people insured, and the type of coverage you are paying for.

Health insurance is ignored by lending agencies when you are trying to qualify for a loan such as a home mortgage or new car. In this situation, lenders are not allowed to consider your insurance policies as an expense, including home insurance, life insurance, auto coverage, or the amount you pay for health insurance. This means that no matter how much you pay for health insurance, it will not affect your eligibility for a loan of other financial endeavors. It is still important to keep your health insurance costs to a minimum, but how much of your monthly income is not an important consideration as long as it is low enough to allow your other financial obligations to be carried out.

Answered June 28, 2011 by Anonymous

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