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Important Questions To Ask When Choosing Insurance Coverage
By: Kevin Erickson
When was the last time you sat down and actually thought about your insurance
coverage? Let's face it, it's not exactly on the weekly "to do list" for a wide
variety of reasons and so… it's not surprising that many are caught unprepared
when an emergency happens. One thing to remember is that you don't have to live
in an area susceptible to a major disaster (i.e. living in an earthquake or
hurricane prone area) to suddenly realize that your current insurance coverage
is woefully out of date.
Purchasing insurance is clearly a daunting task for many, but because it's more
or less a necessary evil I've listed a number of key factors to consider when
you finally do take the time to make sure your coverage is up to par.
Pre Existing Conditions and Full Disclosure
Before being approved for any insurance coverage all applications are looked at
by an underwriter. It's an underwriter job to pretty much look at everything
about you related to your medical history, when you apply for any type of
individual health insurance policy.
Be honest about everything and be sure to disclose any pre-existing conditions
because in most instances the underwriter will find out about them anyway and if
they do and you failed to mention them you could get denied coverage. And even
if the underwriter doesn't catch a pre-existing condition that you failed to
mention and you do get approved you're still not in the clear. The reason, if
you ever file a claim before payment they'll look at your history again and if
they find out about your pre-existing condition at that time, not only will they
deny your claim but you could also be guilty of fraud and have to pay a fine,
maybe something even worse.
Although many companies will not insure pre-existing conditions, some will but
only with a 30, 60, 90, and 120+ waiting period while others are legally
mandated to carry "guaranteed issue" policies. Prior to signing on with a
company, get a detailed list of what is considered a pre-existing condition, the
exclusionary period and the type of coverage that will be provided once the
exclusion ends.
Rate Comparison
Of course, rates are important but remember to get quotes on policies that have
the same type of coverage. Get a copy of all quotes so that you can see the type
and amount of coverage in each category and then make sure that every quote you
get is based on those same coverage amounts so that as the saying goes… you are
comparing apples to apples. If you receive a quote that is way below quotes from
other companies make sure it's legitimate by asking how they can offer coverage
at such a reduced rate. The answer may be that a particular company specializes
in a particular type of coverage and so they offer it at a substantially lower
rate but then again… if it's too good to be true then it usually is. So
remember, a good dose of skepticism will carry you a long way.
Dealing with Independent Agents
Many independent insurance agents are truly a treasure chest of valuable
information about the insurance industry as a whole but perhaps even more
importantly, they can also provide you with feedback from other clients about a
given insurance company, their products and customer service.
You're the Boss So Have It Your Way
Because you and your family are the ones that will have to live with
consequences of whatever coverage you decide to choose, it's truly imperative
that you think through your wants and needs before deciding on the type of
coverage to choose. One question you may want to ask yourself is… How important
is it for you to the have the option of picking your own doctors? If it's not an
issue, then perhaps an HMO would be a good cost-saving option to consider. On
the other hand, if you have a favorite doctor and come hell or high water you
want to see them then you may want to consider the pricier PPO.
Regardless of what company you ultimately decide upon, it's imperative that its
products and coverage options can grow with you and your changing needs. As a
result, a company that specializes in catastrophic coverage may not be the best
course of action if you're planning on having children.
A few other important factors to consider when choosing coverage are: add-ons,
deductibles, customer service and rate increases.
Bundling or Add Ons
Combining or bundling multiple coverage's together. If this is a feature that is
important to you then you need to make sure it's an option your insurance
company offers. An example of bundling or "add-ons" would be to combine short
and long-term disability, drug coverage or dental and vision coverage into a
single package.
Deductibles and Co-Pay
Always look at and ask about the small print. A few good questions are, "What
are you co-pay options" or "Is there an annual cap on the co-pays?" or "Do the
caps cover any 365-day period or do they follow the traditional calendar year?"
You should always look into a companies standing with the Better Business Bureau
and if it's important for you to have access to a local agent then make sure
they have a local office. If not, give the company a call and get a feel for
hold times, hours of operation and services offered via telephone and the
internet.
Unexpected Rate Increases
Ask friends about their experiences with the company. Have they had any problems
service or rate increases in the past two years? This will be a fairly decent
measure of the possible rate changes that will await you in the future.
This article may be reproduced only in its entirety.
About the Author:
Kevin Erickson is a contributing writer to: Medical Insurance | Long Term Care |
Nursing |
