UNDERSTANDING INSURANCE - PRE-EXISTING CONDITION

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This page contains dozens of short articles that will help you quickly understand international insurance. For example, terminology, purchasing details and managing your insurance coverage are topics that are all covered within these articles. Choose an Article From the Topics Below

THE “PRE-EXISTING CONDITION” PROBLEM”

Many people are perplexed because health insurance companies won’t cover pre-existing conditions. This is an area where all insurance companies are very careful. This is one of the main reasons for medical underwriting. Insurance companies know that if they cover all pre-existing conditions they won’t be in business long. For example, if an applicant has a back problem and is taking medication that costs $100 monthly, an insurance company will lose money immediately if the monthly premium is $90. And then, even if the applicant is not taking medication but has had major back problems, the risk factor of a recurring problem is very great. Insurance sales people often ask the question, “Would you insure a burning building?” Of course no one wants to be compared to a “burning building,” but we get the picture. You insure a burning building, you are losing money; you insure a person with serious pre-existing conditions, you are losing money. In Arizona a couple of years ago two bona-fide companies were not careful in their underwriting, and had to leave the insurance business because of steep losses.

Always read carefully the pre-existing clause/exclusion in your insurance brochure. If a company says that they will cover all of your pre-existing conditions, beware of that company--they won’t be around long. An insurance company cannot cover all pre-existing conditions and continue to compete with the premiums of other companies.

So always make sure how a company is going to handle pre-existing conditions. A pre-existing condition can go back to your childhood. Be aware of that. If something happened to you 20 years ago, and it hasn’t bothered you since, it can still be classified as a pre-existing condition. Always make sure you know how a policy defines and covers pre-existing conditions.

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