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Question 7 of 7 in Basics
More ways health insurance companies can mess with you
In a previous article we discussed some ways a health insurance company can make your life more difficult than it needs to be when you are looking to purchase health insurance protection for you and/or your family. Check out the following ways in which health insurance companies and their sales representatives can make the process more difficult for you or cause you to make a wrong decision.
- Making, aiding or encouraging any statement that is false, maliciously critical of, or derogatory to the financial condition of an insurer. There is no place in the sale of insurance for maligning the competition. If your agent, or the company he or she represents, is putting an emphasis on critical, derogatory comments of the competition, you would be well advised to find another agent and/or company. There is a good chance that such comments are being made to distract you from deficiencies in the product being sold or the company selling it.
- Making, aiding or encouraging any statement that is calculated to injure a person engaged in the business of insurance. Same thing. Be very wary of an agent who is attempting to sell you insurance by making statements intended to harm another competitor. If the agent is willing to do this, how can he or she be trusted to provide you with honest information about the product he or she is selling?
- Offering to make an insurance contract in terms different than those actually written down in the insurance contract. This is an absolute red flag! Insurance products are heavily regulated. In order to be sold in a state, the policy must be filed with, reviewed and approved by the state insurance department. Forms that are not approved arenât permitted to be sold in the state. Any variations from the approved forms are not legal. Agents are not allowed to make special deals outside the terms of the approved policy contract form.
- Offering a special favor or advantage (e.g., higher benefits) or valuable consideration (e.g. cash, premium reduction, etc.) as an inducement to purchase the insurance that is not specified in the insurance contract. This is another red flag. This type of activity by the insurer or by the agent is commonly referred to in the industry as rebating and is expressly prohibited by the laws and regulations of the states. If you are presented with such an offer, ask the agent if it is legal and ask for evidence to support it.
- Offering stocks or shares in a corporation as an inducement to buy the insurance. This is just another form of illegal rebating and is prohibited by state laws and regulations. Companies and their agents know rebating is illegal. Therefore, if they engage in it, it is intentional. This tells you something about the integrity of the company and the agent and should make you question whether they can be relied upon with regard to the insurance product they are selling you.
- Using as a corporate or business name one that is the same or is deceptively similar to a name of an existing insurance company or insurance-related company already authorized to do business. Obviously, a new company will not for long be successful in adopting for its name a name that is deceptively similar to that of another company already established in the market. This is a red flag because if the name is too similar to a company already established in the market, there is a good chance the new company is not properly licensed to do business in the state. If it were, the similarity probably would have been detected and prohibited by the state licensing agency â the state insurance department.
- Using a word, symbol or slogan that is the same as or in a way that is deceptively similar to that already being used by an insurance company or insurance-related company already authorized to do business. Another red flag. The use of such a word, symbol or slogan is a warning to you that the company you are dealing with is worthy of further investigation by you regarding their financial stability and ability to provide you with the benefits you have bargained for.