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How To Avoid Common Insurance Traps

By Jason Markum

I don’t know anybody that likes to pay for insurance. Sure we like to have insurance when something goes wrong, but we don’t like to pay for it in the meantime! The problem with insurances is that it’s incredibly complicated and hard to understand most of the time. We are never really sure exactly what kind of insurance we should have, how much we should pay, and how much is too much or not enough.

In this article I want to discuss several of the more common insurance traps that people tend to fall into and how you can avoid them.

The first trap is buying life insurance from a television commercial or through a mail-order advertisement or e-mail advertisement. These companies will hire celebrity spokesman and spokeswomen for their fancy commercials in order to get you to lower your guard and trust them, but it’s almost always a bad idea to do so.

Why is it such a bad idea? Because many of these companies will accept just about anybody as a customer, no matter the persons risk. The only way they can do that is by overcharging everybody in order to cover the bad customers that they accept. Sometimes these companies charge as much as twice as much in monthly fees that a regular life insurance company would charge. They also kill you with fine print; sometimes stating that your policy won’t pay out at all until you’ve made at least two or three years worth of payments!

Now there is one sort of life insurance that you may read about in a mail-order advertisement or via e-mail advertisement, or even maybe through a television advertisement that is legitimate; and that is University alumni group insurance. If you went to a certain college and graduated and are now a member of the alumni group for that school, you may get solicited for life insurance through them. Many times this is okay; but like anything, read all the fine print to make sure.

The next most common insurance trap to avoid is the automatic rejection of a claim. Many times insurance companies will automatically reject every claim you make because they know that a large percentage of people will let the matter drop even though they deserve to have their claim paid.

If you are in a situation where you have an insurance claim that your insurance company has denied,don’t just go quietly away. Begin negotiating with your insurance company immediately after you receive their first notification of the denial.

Keep records of absolutely everything, all correspondence, all telephone calls, everything from medical reports to police reports to anything else that has to do with your claim including pictures and journal entries describing the exact accident.

The rule of thumb when it comes to this sort of thing is persistence. If you simply refuse to go away and keep pushing, most of the time the insurance companies will eventually yield. If not, contact an insurance attorney… that is, an attorney that has experience settling insurance claims.

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