Thursday, May 20, 2010

Insurance Agents causing Bk's

This is a serious matter that has to be put to a stop. I receive calls more and more from clients looking for help. An agent sold them a policy that looked good from the outside, meaning premium was affordable, deductible was affordable, and covered doctors visits. On the inside the policy may not cover what was expected.
This a very common call I get. However when we look deeper into the policy I ask a few question's...

1. What is your actual liability ? The answer is normally, I'm not sure Brian.

As a buyer you need to be aware of this. If we purchase a policy and don't know the answer to this question, both parties in the transaction have failed. This the most important question to ask when purchasing a new insurance policy. How do we figure out an actual liability for health insurance? We need to add the deductible, the co-insurance, co-pay, and benefits caps.
Benefit caps ? Yes, there is such a thing as benefit caps and its more common then most people think. For instance, there is such a thing a maximum surgery benefit. I have seen them as low $3000. This means if you need to have a surgery, the total amount that will be paid by the insurance company is $3000. Do we know of a surgery that cost $3000. ? I can think of two off the top of my head. What this means as buyer, what ever amount over $3k is, you are liable for.

2. Is this a family policy ?

Buyers need to ask about the deductible maximum for a family. Most insurance policies will have a maximum deductible per insured family. Meaning four people are covered under the policy, but maybe the deductible will have to be hit at least twice for two separate insured. The deductible for the family now doubles due two that clause.

3. Is there a cap on your co-pay ? Usually I hear, I don't know.
This is another major mistake by both parties. If we have a 80/20 co-insurance and no cap, we are liable for 20% of all expenses unless stated.
example. Steve has a policy with a 1million lifetime maximum.
Steve in cures 1million in medical expenses and the bill must be paid. Due to the 80/20 co-insurance Steve will now have to pay a deductible, and 20% of the remaining $1million owed. Make sure there is a cap and more importantly the buyer can afford it.

Moral of the blog...
As a buyer ask questions! As an agent, answer the questions before they become an issue!


  1. Brian,
    This is great information. I wish more buyers knew the consiquences of a poor buying decision. Great job.

  2. During my today’s work on the research on insurance, found the insurance is not only the investment it even the security of your invested money as well. And for a long term really fruitful for us. And when we talk about the life insurance it is security of the whole family.