Insurance is a product that can save us from financial drought due to unexpected circumstances. It’s a good product for some and for others it’s too good to be true. People actually have different perspectives when talking about insurance. For that reason we at insured goals decided to create this article that will help you our dear readers to determine if insurance is a scam.
A life that’s free from doubts, a life wherein we can move free. That’s the ultimate goal of insurance. But for some people that goal is too good to be true and for them insurance is a scam. Before we dive deep into the world of insurance and determine if insurance is a scam let’s have a quick trip on the 3 different types of insurance.
- Health insurance, this type of insurance is connected to your health expenses. You pay a monthly premium and in return the insurance company will pay the costs connected to your health services. You can check health insurance for starters to learn more about health insurance.
- Life insurance, a simple explanation of life insurance is if you die your family or any beneficiaries get a certain amount of money.
- Property and casualty, examples of these are auto, business and home insurance. This type of insurance works like any other insurances. You pay the monthly premium in exchange they will help you when bad things happen to your home, car or business.
These are the 3 types of insurance. To make things clear let’s check first what is a scam? A scam is defined as a fraudulent act or deceptive action. So is there any deception in insurance ? To answer this question, let’s dive deeper to know whether insurance is a scam or not.
Some say yes insurance is a scam, it’s terrible. The company charges too much money. They even deny claims and some companies try to avoid them. Some of them pay but after they increase our premium, worst they cancel it.
No it is not a scam, insurance is a system designed to protect us. If it wasn’t for them people could experience financial drought due to a bad thing that could happen. For example you get sick and you can’t pay for your medical expenses. If you crash your car in a tree and don’t have enough money for the repair or replacement. If they weren’t there we would have a major financial crisis.
Think about this, banks wouldn’t allow us to loan money because we don’t have any protection for their investments. So we couldn’t buy our dream houses or cars unless we had an abundance of money or cash. Simply without insurance, banks aren’t comfortable loaning us money. Hospitals on the other hand would deny us any services without insurance. If no one’s gonna pay for these expensive things then hospitals are not going to take care of us. So insurance really provides us with help wherein hospitals can cater as many people as possible. Insurance is really a great help. When bad things happen to us like if you get sick or passed away, there’s something that’ll protect us.
What do I think if insurance is a scam? Well, let’s divide my opinion into three parts.
First, is it expensive?
I think it depends on the scenario, insurance varies differently to people. But in general, insurance companies do try and balance their claims going out with their income coming in. In my opinion Auto, Business and Home Insurance is not a scam because there’s a balance in there. Health insurance on the other hand is expensive. It’s incredibly expensive, health services are also expensive. Deductibles are super high for lots and lots of insurance policies and it’s very hard for us to get health insurance that is affordable. So I think it’s a scam in terms of expenses but you can check the risk of low premium health insurance. Lastly, life insurance, well life insurance is inexpensive, especially when you get it when you are young. You can also check this free life insurance guide.
Second, do claims get paid?
It also depends on the situation, there’s a lot of instances when people get frustrated over getting paid. Generally, I see claims getting paid properly in auto, business and home insurance. Most insurance companies are doing their best to properly pay an insurance claim because they can’t afford to make you mad especially at that point. That point is a decision point wherein you decide if you will stick with the company for the rest of your life or if you’re going to move to another insurance provider. Well, of course insurance companies know that and they understand that so they need to act properly and respond accordingly.
Health insurance on the other hand, it’s a 50/50 for me. There’s a part wherein it’s a scam and some are not. In my personal experience health insurance companies are not scam because they actually take care of me and my parents. So some claims are being paid, but I’ve heard a lot of stories wherein they weren’t paid out by some companies. Of course that situation isn’t acceptable. I think those horror stories are enough evidence to think that some health insurance is a scam. That’s the reason why 50% insurance is a scam and the other half is not a scam for me.
For life insurance, actually I didn’t have any experience regarding this type of insurance but there’s a lot of stories that claims usually get paid out as long as the agreement or the deal is set up properly. I didn’t have any encounter regarding horror stories wherein life insurance policies didn’t pay out. So for me life insurance is not a scam and it’s legit.
Are these three types of insurance good for people and in our community ?
For Home, auto and business insurance it’s a yes for me. It’s absolutely good for people or in our community. We all want to achieve our dream houses, we want banks to loan us money, we want to buy cars or our dream car, we also want to have a financial system that has checks and balances in it and insurance is one of those checks and balances and so to have that is super important and so yes it’s good for our community.
In health insurance, yes of course, it’s good for people and in our community. Sure health insurance is expensive but bad things that can happen to you or to your health are much more expensive than health insurance. So, without this type of insurance, it would put a lot of sick people out on the streets or put them into bankruptcy. In conclusion, health insurance is good and important in our community since we are talking about health.
Life insurance on the other hand, if you have someone who passed away, maybe your wife or husband or someone you loved. If you’ve had them pass away and they had a life insurance policy it can make the process of dealing with the situation a little bit easier and that point is absolutely good for people in my opinion.
How to avoid insurance scam
First things first, you need to do some research, make a background check on the companies, check their reputation and make sure to pick a company with a good reputation.
Second, try to use a local agent when possible. The reason for this is most likely they’ll take good care of you because they might see you in the community, a local agent is going to be a blessing for you.
Use an independent agent if available. It’s a better approach to purchase insurance because there’s an internal competition or there’s a competition inside the agency. Independent agents don’t work for the company they work for and for me it’s a positive sign.
Lastly, try to do your homework, understand the basics of insurance and or your policy.