The foundation of insurance rests on the concept of protecting individuals from risk, uncertain in terms of scope and timing but predictable based on large numbers. People buy home insurance to protect against fire and other risks that can generate property loss. They buy disability coverage to protect against the risk of a condition that impacts the ability to earn a living, and auto insurance to provide protection for themselves and others in the case of an accident.
No consumer would ever expect to gain access to home insurance to protect their home the day after a garage fire or obtain collision coverage the day after automobile accident — and most consumers try to reduce their chance of bad things happening through a variety of risk avoidance and risk reduction techniques. We buy smoke detectors, drive within the speed limit (most of the time), and buy insurance to protect us from unforeseen events.
Health insurance presents many more challenges, however. Many consumers expect to buy insurance coverage only when they need it, and many don’t see much value in reducing their risks.
Even with these challenges, consumers looking for coverage have many options for coverage in the individual health insurance market — even individuals with medical conditions. Following are four quick tips to help you find coverage for your risky clients.
1. Get them married off to someone with group coverage
The fact remains joining a spouse’s policy or finding a new job that provides access to group coverage is a solid approach for ailing prospects seeking to obtain coverage. Since prices are set based on the group’s claim experience, this gives your client a good chance to gain quality coverage at a reasonable price.
Gaining access to an association or affinity group program also may provide a short-term solution — especially if the group is newly formed. However, premium levels can become problematic in the longer run, as the pool matures and the healthy individuals seek cheaper coverage elsewhere.
In addition, some states allow you to form groups of one or two individuals, but that requires some effort and is not consistent across states. Overall, these options have limited viability in a recessionary environment, and if your client or their loved one has commitment issues that preclude the marriage option, one of your best bets is to find them permanent private insurance coverage.