We often view insurance salesmen the same way we view the used car dealer: as someone who will do whatever it takes to convince you to pay more for less. Now, most insurance sales representatives want to make sure you have the right coverage for your family or your business. But there can be dishonest sellers out there. Here is a list of some common deceptions health insurance representatives use:



1. Misrepresenting the scope of coverage.

Health insurance representatives will distribute information which exaggerates what the policy covers. Whether in person, over the phone, or in pamphlets, a dishonest insurance salesman will claim that a policy lasts longer, or is "all inclusive." Such generalizations are a sure sign that your health insurance representative is being dishonest. There will always be significant exceptions, policy limitations, or other benefit reductions. You need to know what these limits are before you buy any insurance policy. If you suspect your agent is being purposefully vague or dishonestly generous, ask him to point out in the policy where these promises are worded. Chances are, he or she will have some kind of excuse for why the wording isn't in the document. If it isn't in writing, it doesn't exist. Period.

2. Encouraging you to surrender your existing insurance before the new one goes into effect

Sometimes, an insurance representative will worry that if a client has two health insurance policies simultaneously, they will be unable to afford both and the sale won't be a "sure thing." Dishonest vendors will try to mislead you by saying you must let your old policy expire before the new one can begin. This creates a huge problem should anything happen during the policy overlap—you could experience a catastrophe and find yourself without any representation whatsoever. Be very wary of any health insurance agent who demands you only have one policy at a time. It's good planning to allow for some overlap so you can read through and tweak your new policy, while still having the safety net of the old policy. That way, if you find your new policy isn't what you want, you still have time to get a different policy without being uninsured.

3. Misrepresenting the policy with fancy names

If your policy is being marketed under the name "All-Purpose Blanket," you would assume this means the policy protects all contingencies of health care needs. However, you might be disappointed to learn that the policy leaves out a significant number of factors you thought it covered. This is a tool that can be employed even by the best insurance companies. There is no such thing as a health insurance policy that covers all medical expenses. Even the most comprehensive will have limitations, and it's up to you to find out what those limitations are.

4. Running "Negative Campaign Ads"

There are several ways that dishonest insurers try to scare you into signing up with them, One of the ways is to create negative campaign ads that criticize what "most insurance companies" are doing, or tell you ways in which their company avoids these negative pit falls. All insurance companies are monitored by the state, and aren't allowed to do a great many things these ads accuse them of. Advertisements are the one area of insurance, however, that isn't regulated by the D of I, so the promises (or threats) in them are often misleading. A good insurance company won't need policy advertising—the legal document will speak for itself. Another example: false or overly critical statements made to the buyer of the policy (you), or your current insurer. This is done to embarrass or shame you into signing with them. Know that any sort of negative behavior is derogatory and unprofessional—two characteristics you don't want in an insurance company.

5. Selling an "elite policy" that has been approved by your state's Department of Insurance.

If you're insurance provider is selling a policy based on the fact that it has been approved by your state's D of I, and is therefore better than other non-approved insurance policies, you shouldn't be buying. By law, all health insurance policies must be approved by their respect state's Department of Insurance. This fact doesn't make one policy better than another—it simply asserts that it's legal. Don't be misled!

6. Offering a verbal contract different from the one written down.

If you request a custom policy, you might object to some things you see on the standard contract, and want them changed. A good insurance agent will, in a few days, bring you a copy of the contract with your changes which you will sign. A dishonest agent will try to get you to sign the standard contract with the "understanding" that these provisions exist, or tell you the changes will be "added later." This is a huge red flag! Avoid any sort of business dealing with a health insurance company which attempts this sort of behavior. Because health insurance is so regulated, the policy needs to be reviewed by the State Department of Insurance before it can be approved. It is illegal for agents to make special dealings outside of the approved policy forms.