Insurance Explained

Why can't health insurance be more like auto insurance?

2009-09-08T01:54:00.000-07:00

I came across an interesting article comparing US health insurance to car insurance. The premise is that if car insurance worked like health insurance it would not work at all. Because it would mean that your insurance would have to pay for new tyres, services, maybe even petrol. Car insurance fortunately does not work that way, and that is why it is affordable and why it works.The article is reproduced below if you are interested. The original link is here.
Opinion
Why can't health insurance be more like auto insurance?
If insurance paid for every oil change and engine failure, we'd have an autocare crisis, too.
By Zach Krajacic
from the August 5, 2009 edition

BUFFALO, N.Y. - Imagine how much automobile insurance would cost if it paid for all expenses associated with owning an automobile – oil changes, engine failures, worn-out tires, brakes, rust, and so on. The number of people who couldn't afford car insurance would rise dramatically, and we would have a car insurance crisis in America.
That is the situation with healthcare. As health plans increasingly pay for almost every service or procedure, ameliorate our every discomfort, and succumb to every cultural whim and fad, the price of insurance continues to rise.
Health plans are paying for every imaginable benefit – while automobile insurers are not – because of both consumer demand and state mandates.
The demand for additional healthcare benefits is greater than for additional automobile insurance benefits because many people feel entitled to have access to every possible healthcare service. The costs of additional benefits are not always clear to consumers; thus, many people perceive the benefits to be "free." In response to consumer demand, health plans sometimes expand coverage on their own. In other cases, they are forced by politicians running for reelection to cover additional services or procedures.
To make health insurance more affordable, state governments should stop mandating additional benefits and rescind all of their previous mandates. In addition, both private and public insurers (such as Medicare) should agree to pay for only costly and essential medical services and procedures (similar to the way they banded together to pledge to reduce $2 trillion in healthcare expenses a few months ago).
Under the system I am proposing, health insurance would pay for emergencies and urgent care, diagnostic tests and X-rays, medically necessary surgery, hospitalization, therapy, and any other critical services that few people could afford to pay out of their own pockets. Individuals would pay for routine, discretionary, and elective services – such as doctor visits, acupuncture, marriage counseling – on their own.
This type of system – which has not yet been tried – would lower healthcare costs and make insurance more affordable for everyone, especially the uninsured, by reducing the number of healthcare services that are used. When the use of services goes up, health insurers must raise premiums to pay for the increase in expenses. This makes it more expensive for insured people to keep their health coverage, while also making it more expensive for uninsured people to purchase coverage.
Insurance is intended to be a pooling of people's money to pay for large, unexpected expenses – not for every expense that is incurred. In other words, it is supposed to be a safety net for catastrophic events.
Yet many Americans go to the doctor for all kinds of trivial ailments, because their insurance pays for it. True, many people want this type of coverage, but that is because they do not understand the long-term cost implications. If Americans want to keep the current healthcare system sustainable (and it appears they do), then they need to take on more financial responsibility for their healthcare. People who choose to visit the doctor for the sniffles should pay for it themselves rather than making everyone else pay for it. If they did, the use of services – and thus the cost of healthcare – would go down.
If we can budget for our phone, electric, cable, and gas bills, as well as for unexpected household and automobile expenses, then we can budget for routine healthcare services. This would require some families to forgo the purchase of a plasma TV, but it would make health insurance more affordable.
In addition, most health plans even cover lifestyle choices that have been sold as medical conditions by lobbyists, pharmaceutical and medical companies, politicians, the media, and pop culture. Some of these covered services – such as cosmetic procedures, birth-control pills, and abortion – do not even address a diagnosis. (Contrary to popular belief, pregnancy is not a malady.) If there is no medical condition, then health insurance should not be paying for it.
By shouldering a greater burden of their healthcare costs, Americans would probably eat more healthily, exercise more, quit smoking, and lead healthier and happier lives. A healthier population would use fewer medical services, which would lower healthcare costs and premiums.
When it comes to healthcare, we should not confuse luxury with necessity. By transforming health insurance into a system that simply pays for essential medical services and procedures, more Americans would be able to afford insurance – and there would be far fewer uninsured Americans.

Insurance Fraud

2009-08-28T22:32:00.000-07:00

All right with the last couple of posts on home insurance car insurance I though i would post some examples of real life fraud. The examples that follow (By the way all from the US) were sourced from the Coalition against Insurance Fraud (USA) and are some sad exaples of how insurance fraud aen't always victim less crimes.

Read on you would be amazed...

Example of Car insurance fraud

In 1997, Long Beach California, two men attempted to stage a car accident to collect car insurance money by stopping suddenly on a freeway in front of a tractor. Unfortunately, Juan and Maria Lopez, and their 2 year old daughter were following the tractor in their car. When the tractor stopped in front of them, a gravel truck rammed the Lopez family from behind, killing the young family. The two men who had committed this act of car insurance fraud, resulting in the tragic death of the Lopez family, each received 11 years in prison.

Example of Contents Insurance Fraud

Once again in California, a software distributor had a lot of out-of-date merchandise he wasn’t able to sell. The merchandise was insured under his business contents insurance. In 1994, the Northbridge earthquake occurred, so the distributor ordered his staff to destroy the merchandise so he could claim it all under earthquake damage on his contents insurance. An employee reported the contents insurance fraud however, and the distributor received over 4 years in prison.

Example Of Building Insurance Fraud

A restauranter in Tampa hired two teenage boys to burn down her restaurant so she could collect building insurance money in 1996. The arson attempt went horribly wrong, and one boy died while the other was permanently scarred. The restauranter was sent to prison for 30 years.

Example of Home & Contents Fraud

A restaurant owner in Tampa hired two teenage boys to burn down her restaurant so she could collect building insurance money in 1996. The arson attempt went horribly wrong, and one boy died while the other was permanently scarred. The restauranter was sent to prison for 30 years.

WHATS PAY AS YOU DRIVE?

2009-08-10T17:29:00.000-07:00

So what is this Pay As You Drive Inusrance that everybody seems to be on about? Well I will run you through it. Just consider if you fit into one of the below categories Do you fit one into one of these situations? You own a car and don't drive it that much? You live in a smalll community and don't drive all that far. You are in the military are overseas for most of the year. You have a vheicle that you only use on weekends to do a few things shopping ect (That's Me)

PAYD (Pay As You Drive) is a cover that you pay for the amount of miles you drive in a year. The more you drive the more you pay and of course the less you drive the less you would pay.

Sounds great right well in my opinion the financial reward for driving less makes goodeconomic sense. always go through the setails with your insurance to ensure you are comfortable with the level of cover, but it seems the pro's far outweigh the cons.

As always shop around!

Get A Free Quote in 4 minutes

Life Insurance A Must!

2009-08-04T02:28:00.000-07:00

Now a large number of people may think that life insurance is just something that you consider when you get older, However there are quite a few benefits to taking up a life insurance policy earlier in your working career. Even if you don't have a family or dependants or your employer has a policy in place for you and you think it is adequate for your needs. there are a number of reasons you should think about taking out your own life insurance.

Now just because your employer provides you with a life insurance policy that does not mean that doesn't mean that you should just rely on it alone. While quite a few companies offer life policies as a primary benefit of a job position, the figure often enough doesn't give back enough to be of all that much help to your family - the most important part especially if you passed away.
An example of which would be that a lot of firms may offer 1 or two tomes your annual salary.
However you will find that most financial planners will recommend that you take out up to 10 times your annual salary.

Also, it is very important as a consumer to be aware that there are two different types of insurance out there. They are known as term insurance and investment types

Term insurance will basically provide benefits to your family or Dependants if you pass away during the time specified withing your policy. where as the investment type aka "permanant insurance" will include endowment policies and 'whole of life' policies. This type of life insurance stays in effect for as long as you continue to pay your premium. Now part of that premium goes to an investment account so as well as paying out in the event of death, it will also build up in value which you can actually cash out before you dies. Now that's a great reason to buy Life Insurance while you are younger - as the younger you are the more you may be able to cash out when your older.

As always remember to shop around also I have included a link on the right hand side of this to get yourself a free life insurance quote.

Cheers

Garry

Really Weird Insurance

2009-07-31T20:31:00.000-07:00

Doing my daily google and found a very strange policy
Now you would imagine that hitting a whole in one would be a great thing right? Hmm well,
it seem according to the underwriting around golf, If you manage to get a whole in one on the course than its tradition you buy a round of drinks at the bar! A great but rather expensive exercise, especially if there are around 50-100 people at the bar at the time. Now what im getting at is aparantly for skillfull golfers you can take out hole in one insurance to cover you.
And if you are a passionate golfer, (or anyone else for that matter) you can also take out body part insurance. Mariah Carey and Heidi Klum have both insured their legs, while Merv Hughes insured his signature moustache. And while we are mentioning body hair, Tom Jones has a cool $7 million insurance policy on his chest hair.

Insurance Quotes - Does Shopping For Insurance Affect Your Credit Score?

2009-07-27T05:00:00.000-07:00

Insurance Quotes - Does Shopping For Insurance Affect Your Credit Score?

Now I would like to write about Insurance quotes and insurance company underwriting as many have recently added a new factor to evaluate new customers. Insurers will actually check up on your credit rating. Basically they have worked out through statistical testing that apparently people that have better credit ratings are better risks and also that people with defaults poor credit history are not all that great as potential customers. So pretty much the insurance companies and agents out there will see a good credit rating and see you as a low risk client.

Surprisingly there are quite a few customers out there that worry that requesting new insurance quotes could effect there credit rating.

So does shopping around for insurance quotes mess up your credit rating?

The answer there is "NO"

Now there are two types of credit inquiries:

Whats known as "Hard Pulls" - This means that its a check for acquiring credit from a lender, credit card ect

Also there are"Soft Pulls" - This is when inquiries are made that check your credit rating. This is the kind of pull that an agent or insurance company will more than likely perform during the quoting process. Now the good news is that these are not noted on your credit history so relax.

So hope that helps to instill a bit more confidence that shopping around for insurance quotes will not effect your credit ratin. And a very important fact to know is that a good or high credit rating can lower your insurance quotes when you shop around.

GREAT TIP! The trade group Independent Insurance Agents and Brokers Association (IIABA)
has found that a whoping 85% of new insurance buyers will use the internet to get quotes and research before making a decision. So start shopping around online and all great local insurance agents to get in touch with you with best competitive rates to suit your needs

You could literally save 100's of dollars a year and then some just through the insurance quote process by simply shopping around.

Plus the new agent of your choice can handle the cancellation of your old policies if you like and even take care of that dreadful paperwork.

In conclusion shopping online for insurance quotes is flat chat easy, straight forward and did i mention FREE!!!! It doesn't cost you a red cent to get an insurance quote.

You could get better coverage for less money...it happens all the time.

Don't waste time, and don't spend more for coverage than you have to!

Cheers

Garry Granger

Insurance

Links

2009-01-14T22:30:00.000-08:00

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