Tips When Shopping for Insurance

Insurance is a product you purchase to protect yourself from financial disasters, and your needs for protection can change over time. It´s important to understand the insurance policies you have and decide if those coverages are still right for you. If you´re considering buying insurance, here are some shopping tips to remember.

Never be pressured into a decision. Never buy at the first meeting and seek the advice of someone you trust.

Compare carefully before you switch policies. Before switching policies, compare benefits, premiums, limitations and exclusions carefully.

Find out about your agent and company. Call the department of insurance in your state to verify if an agent or company is licensed to do business in Texas.

You also can view a company profile that includes information about the company's financial status and complaint history.

Never buy anything you do not understand. Ask questions and take notes when talking to an agent. These could help you later if there is a dispute over what you were told about a policy.

Answer all questions on the application accurately. Omitting or falsifying information could cause the company to deny your claims or cancel your policy.

Read what you are asked to sign. Never sign a blank application form.

Do not pay cash or make a check out to an individual agent. Make checks payable only to the insurance company or insurance agency. Insist upon a receipt signed by the agent on the company letterhead.

Know your rights. Most health policies have a "free-look period" which allows you to return your policy within 10 to 30 days after receiving it to get your money back.

Group or Individual???
There's strength in numbers, particularly when you're buying health insurance. As part of a group plan, you can enjoy a significant discount on premiums as well as comprehensive policies.

But if you leave that job — or start another one that doesn't offer health insurance — you may be surprised at just how expensive the same coverage is when you buy individual health insurance. ("Individual" means the insurance is not connected to a business or to the self-employed. You can purchase an "individual" policy that covers your whole family.)

"People enrolled in individual plans pay premiums that are more in line with their expected health costs..."

In addition, there is no guarantee that an insurer will take you on. That's because unlike group plans, if you have health problems, individual plans are medically underwritten and the insurer may reject your application or attach exclusions to your policy. However, some states don't allow this practice and require that any insurer selling individual health plans must offer you a policy, no matter what medical problems you have.

However, your premiums are still likely to be substantially higher. People enrolled in individual plans pay premiums that are more in line with their expected health costs, so the premiums will be higher for those who are older or less healthy. To find out what your rights are, contact your state insurance department.

Pricing is probably the most bewildering aspect of individual health policies, so it's worth your while to shop around. For instance, the premiums for similar products from different insurers can vary by as much as 50 percent for the same person. What's more, the rules and regulations about individual health insurance vary from state to state, making comparison-shopping a bear for the uncertain consumer.

"The first step is to evaluate your needs and understand your health insurance options..."

If you're faced with finding individual insurance, don't let the confusion tempt you to go without. Even if you're healthy, you could fall off a ladder or have a serious car accident and be financially ruined. Plus, you'll lose your pre-existing-conditions coverage in most states if you go without insurance for more than 63 days.

Finding the right balance of coverage and cost can be challenging, but it's a necessity. So take your search one step at a time. The first step is to evaluate your needs and understand your health insurance options. For some, that may mean buying COBRA coverage from their former employer.

Why Consider COBRA

When you leave a job, you don't necessarily need to leave your health insurance behind. Thanks to COBRA (the Consolidated Omnibus Budget Reconciliation Act of 1985), certain employers that provide a group health insurance plan must offer most employees who would lose their coverage the option to continue it for up to 18 months. The catch is that the employee will have to pay the full premium, up to 102 percent of the employer's cost. The extra 2 percent is an administrative fee.

COBRA is best seen as a safety net. You have 60 days to make a decision about whether to enroll in COBRA, and when you do, the coverage is retroactive. As soon as you know you will be losing your group coverage, start shopping for individual coverage. Go out and talk to independent agents who represent different companies. If you find a policy you like, apply for it. You should be able to find out if you are accepted within those 60 days. If you find a less expensive policy that meets your needs, buy it. If not, you can still elect COBRA.

COBRA covers all members of your family, so if you find an individual policy that works for you but won't cover your wife's pre-existing illness, you can go with COBRA only for her.

A pre-existing condition will make finding individual health coverage more complicated — and more pricey — but that shouldn't knock you out of the race completely. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) restricts the ability of insurers to exclude pre-existing medical conditions from coverage — but only if you were previously part of a group plan and meet certain other strict requirements.

COBRA aside, the individual health insurance market is a wild frontier. The landscape varies from state to state and the rules are constantly evolving. That's why it's imperative to comparison shop. Since Freedom Benefit Solutions is an independent broker/agent we are well-versed in individual health policies and can help you sort through your options and find the policy that's right for you and your family.

Among your choices, you'll find that the individual health market offers the same plans as the group market, including health maintenance organizations (HMOs), preferred provider organizations (PPOs), point-of-service (POS) plans, and traditional fee-for-service arrangements. Your budget, physician preferences, and health requirements will all have a hand in deciding which type of plan is best for you.

Freedom Benefit Solutions is an information resource, we want you to buy insurance from us because you are making an educated decision. That is why we are not high-pressure, ask us as many questions as you like. We are confident you will buy from us because we know you will get the plan you think is best for you . . . not the one we sell you!

Let's get you covered today . . . we are waiting to help!