Questions to Ask | Tips | Important to Remember

Everyone knows how to shop for a home, car or other major purchases, but most people don’t know how to go about shopping for individual/family coverage.  Many of you are leaving group insurance and have never owned an individual policy.  Individual policies are different then group policies and you really need to understand how individual policies work and how to shop for them. 

When shopping for insurance you may have several agents contact you, or you may feel comfortable dealing with just one agent.  It's usually better to work with an independent agent, who can provide insurance comparisons between multiple companies.  In either case, here are questions you’ll need to know the answers to before applying for any policy.

NOTE: If an agent ever presses to meet with you make sure all the questions below are answered before the appointment is set. 

Do you offer “major medical” policies?

Always make sure you purchase a major medical policy.  If you need an affordable policy ask your agent to raise the plan deductible or look into a Health Savings Account. If the agent is a general agent or broker, then he or she should be able to check plans with other companies.

What is the out-of-pocket max?

This could very well be the single most important question to ask.  The out-of-pocket max is simply the amount you would be responsible for before the plan pays 100%.  You should never purchase a plan that does not have a set out-of-pocket max. 

What is the co-insurance? 

The co-insurance is the percentage of the bill your are responsible for. If you have 80/20 co-insurance you would be responsible for 20% of the bill until you reach your out-of-pocket max. 

What is the deductible?

This is the amount each person would be responsible for before the policy pays. Deductibles work differently for each policy. Ask if the deductible needs to be met for office visits and prescription drugs. 

If I had a $60,000 surgery what would I owe?

This should be a simple question for any agent to answer.  It’s the deductible plus the out-of-pocket max.  If any agent ever fails to answer this question or says “the odds of you having a surgery that large are…..” then simply continue to shop. 

Is there a processing or application fee?

Some companies charge an application fee.  Find out how much the fee is before you sign up.

Do I need money down?

Some companies can process your application without any money down and some require the first month's premium.  The companies requiring money down will refund this money, if you get declined or if you decide not to take the insurance during the 10 day free look.

Do I have to join an association?

Some companies require you to join an association to obtain insurance.  There is nothing wrong with this.  But ask how much the association dues are and if there are different levels of membership, which may add to the cost of the insurance

How many policies do you offer?

A lot of agents will offer you a quote on just one policy.  However most insurance companies offer at least 3 different policies.  Always ask the agent how many policies are available and the major differences between each one.

IMPORTANT TIPS ABOUT SHOPPING FOR A POLICY

• Never feel pressured by an agent.  If an agent is just pressing to meet with you without answering the above questions is not a good sign. 

• It's more advantageous to deal with an independent agent or broker rather than a captive agent.  Brokers/independent agents can do plan comparisons and rate comparisons between multiple companies.  Customizations and recommendations can be made based on your needs and your budget
  
   
• If an agent tells you that he or she can customize a plan for you, always ask how they customize plans.  Most insurance companies offer ways to control premiums by changing deductibles, copays, and coinsurances without changing the actual benefit coverage.  If an agent reduces your premiums by reducing your benefits, be aware of this before purchasing the policy.  You may feel good about it in the beginning because you are getting a lower premium, but you may end up regretting it in the future.
   
• Always fully disclose your entire health history for the past ten years.  If an agent does not know your entire health history they cannot give you an accurate quote. 

• Always review the material before signing.  Have the policy details either e-mailed, faxed or mailed to your house.  We live in a high-pressured sales world.  Health insurance should not be high-pressure. 

• Always run a few scenarios past your agent: If I saw my doctor, had blood work done and got prescribed a drug, how much would I owe?  If I had a $60,000 surgery how much would I owe? 

• Never deal with anyone evasive.  Also, never deal with anyone who says “it’s too complicated to discuss over the phone.”  Policies should not be “complicated.” 

• Be wary of agents who tell you things like life insurance, critical care, or other benefits are “included.”  The only thing “included” in a health insurance policy is health insurance.  Any other “product” is extra.  Find out the cost.
  
   
• Also, be aware of sales folks or companies who disguise themselves as insurance companies when in fact they are discount houses offering discount plans.  These discount plans usually have very low rates and sound attractive.  But they have limitations that could potentially be a financial hardship to you, if you have a catastrophic health/accident situation occur.  It is recommended that you definitely ask the above questions.  You may be purchasing a discount plan instead of a major medical insurance policy.  I would shy away from these types of discount plans unless you are willing to take on the added responsibility and risk that come with it.  Ask if the agent is a licensed insurance producer with the state.  If they are not, this is a clue that the plan they are offering is not insurance.

IMPORTANT TO REMEMBER

• No one can be cancelled or rate-increased on any policy due to claims or a change in health. 

• All major medical companies offer on-the-job coverage if you’re self-employed and you don’t carry workers comp on yourself.