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Now that you've decided which benefit you
need you are down to the finish line -
decisions, decisions, decisions. Which company should you chose to provide
your supplemental coverage? Again, do your homework before you do anything
else. Here are a few steps you can take to help you make an informed
decision.
- Contact your state insurance
department for a list of companies licensed to do business
in your state.
- Check on the financial
stability and performance of the company that interests you.
Insurance companies are rated on a scale from A to F by independents
such as A.M. Best, Standard & Poor's and Weiss Ratings. Look for companies
that carry A's with all three of these. You can check insurance company
ratings at www.ambest.com as well.
Explanation from one extreme to another:
A rating - company has strong capitalization
as a cushion against the impact of unexpected losses; follows a strong
investment policy in terms of safety and liquidity, had a strong profit
performance during the past five years and has good results on stability
- in other words, it offers excellent financial security.
D rating - means the company demonstrates
significant weaknesses which could negatively impact policy holders,
generally liquidity and stability is weak and you may want to look
for a safer company.
- Ask the company whether
their policies are "attained age" or "issue age".
Attained age policies will increase your premium every time you have
a birthday, which could mean you end up paying a 100% increase in
premiums in as little as 5 years. Insurance companies will offer these
types of policies what seems to be dirt cheap when you are 65 and
it may very well be a good deal for the first year or two. However,
the premium increases in subsequent years are not worth sticking around
for. Look for issue age type policies which place you in an age group.
Your premiums will never go up just because you have a birthday and
if there is a premium increase it is spread out over the entire base
of policy holders. These increases can be anywhere from 3% on up but
may not occur very often.
- Ask about renewability.
Is the policy guaranteed renewable or does it include a clause that
will allow the insurance company to drop you like a hot potato when
you get seriously ill? It won't say this in so many words but watch
for legalese and fine print.
- Find out if the company
is restrictive with regards to doctors. Do you have to choose
a primary physician and stay within a network? Once you venture outside
of the network the policy may not pay any benefits - so check and
be sure you can see any doctor you want, anywhere in the country.
- Ask how claims are handled.
Do you have to do any paperwork or is it entirely handled by the company?
Preferably you want a company that does electronic claims filing.
By late 2003 all companies are required to do this so you may as well
find one that already has all the kinks worked out of the system.
- Does the company offer
other benefits such as prescription discount cards, mail-order
prescriptions, vision, eye and dental discounts as well as vitamin
or chiropractic discounts? These discounts can vary from provider
to provider but can save you up to 40% in some cases. Call around
the pharmacies and ask for prices on the same prescriptions - compare,
compare, compare!
- Who do you contact if you
have questions or concerned? Are you required to call a faceless
1-800 operator in Texas while you live in Georgia? Or, will you have
a personal agent you can contact locally to help you? Personal agents
often provide a better response time and 9 times out of 10 the agent
that sells you the policy will stay with you as long as he or she
is with the company.
The final decision will always
lie with you and what you can afford. As mentioned earlier premiums
can vary from company to company although plans A through J are the
same wherever you go. What gives your potential carrier the upper hand
will be value, financial stability, excellent customer service, fast
payment of claims and a genuine desire to help you. I suggest steering
clear of companies that cannot deliver on one or all of these aspects.
You may contact me at 877-221-0514 or hrihan@americaninsuranceagency.net
for any questions that this information may have brought to mind.
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