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? Lets face it, its not exactly on the weekly "to do list" for a wide variety of reasons and so... its not surprising that many are caught unprepared when an emergency happens. One thing to remember is that you dont 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living in an earthquake or hurricane prone area) to suddenly realize that your current insurance coverage is woefully out of date.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 its more or less a necessary evil Ive 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. Its 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 doesnt catch a pre-existing condition that you failed to mention and you do get approved youre still not in the clear. The reason, if you ever file a claim before payment theyll 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 its 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 its 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.

Youre 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, its 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 its 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, its 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 youre 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 coverages together. If this is a feature that is important to you then you need to make sure its 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 its 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.

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Kevin Erickson is a contributing writer to: Medical Insurance | Long Term Care | Nursing