Protect Yourself From Health Insurance Scams

Many thousands of unsuspecting people end up falling victim to health insurance scams every year. Unauthorized insurers are prepared to sell health insurance with a low-cost premium and most people would never think that there are fake insurance companies waiting to steal your money. The current trend of scams is on the increase, spurred on by ever increasing health care costs and rising numbers of people who are uninsured. This results in more individuals looking for the best deal. With so many companies offering health insurance, how do you tell the genuine ones from the scams? There are ways to keep yourself safe from the scammers and still pay a reasonable premium.

The first question you must ask yourself is - does a health insurance company seem to be offering a policy that is too good to be true? This could be the case. You must remember that health insurance is expensive because medical care is also expensive. Victims of health insurance scams are often people who shop around and think they have found a great deal until they have to make a claim and then find they are left without insurance. The phony companies have collected the premiums, but haven't passed them on to the health care providers.

Every state has laws making it an offence to operate an insurance company without a license, but unlicensed plans ignore these regulations, which include solvency standards that ensure a company has the ability to pay the claims of insured individuals. It can be extremely difficult for potential customers to see the red flags to watch out for during the sales pitch of a particular policy.

The con-artists are professionals at what they do because very often it's how they make their entire living. They will have paperwork that looks identical to a real insurer and give the impression that seems to be that of a genuine and legitimate agent. Common scams can include loopholes that make sure what they are selling is not actually insurance. This would mean it is a discount program of some sort. These individuals may contact you by telephone, offering a discount to people who, for one reason or another, do not qualify for real insurance. Also be wary if an agent mentions their plan being "reinsured." It is true that some legitimate insurance companies do have reinsurance to protect themselves, but it is never mentioned when trying to sell insurance to a customer.

If you must save money on insurance, instead of taking out the cheapest policy, raise your deductibles and self-insure items such as dental and vision care. You can also take out a policy that makes you pay for the small stuff yourself, but covers more serious illness and hospitalization.

Health insurance scams are not easily spotted. Insurance is a complicated subject and the scammers may try to take advantage of your ignorance. Therefore, it is important to know all you can about health insurance before purchasing a plan. Do your research. Weiss Ratings, a Florida agency which made its name by being tough on insurance companies can carry out a company search for as little as $15.

If someone calls your home and tries to sell you a form of health care or health insurance, take what knowledge you have and ask as many questions as you can think of. Any indication that this may be a fake insurer should be taken to the state insurance regulators for investigation. You could be saving yourself and others from becoming a victim.

Posted by: Robert Murison Posted on: March 23, 2007


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