Monday, February 12, 2018

Condolences - And Here is Your Rate Increase

Some forms of insurance offer multiple policy discounts, family discounts, household discounts, etc as a marketing incentive. The thought process is, if you get a discount for buying more insurance from the carrier you are more likely to select that carrier over one who does not have discounts.

It might also encourage you to not only buy your coverage there but could be an incentive to leave all or part of your business with the same carrier.

But it turns out there is a dark side to the discount game. One I discovered quite by accident.

Many carriers that write Medicare supplement coverage will discount your premiums as much as 12% when there are multiple policies involved. A few will even discount premiums if you live with someone over the age of 18.

Seems there might be some benefit to having and adult child still living under your roof.

But I digress . . .

You can lose your discount if your spouse divorces or switches their coverage to a different carrier.

Makes sense.

But you can also lose the discount if your spouse DIES.

Spotted this on another blog that seems to be devoted to excoriating insurance carriers.

The agent told me that he had a homeowners insurance policy covering a husband and wife. Recently, the husband died. At the widow’s request, the agency sent a change request to the insurance company (which will also remain anonymous), asking it to remove the deceased husband’s name from the policy. The company issued an endorsement to the policy, along with a bill for an additional $26 in premium. Like any good agent, our member called the company to ask why the widow was being charged $26 for taking her late husband’s name off the policy. The answer: The company ran a check on her credit score and found that it was not as good as her husband’s. Under the company’s pricing system, this knowledge generated a higher premium.
 This insurance company charged a new widow $26 because she was more of a credit risk now that her husband was gone. - Insurance Commentary

Let that one sink in.

Your spouse dies. Insurance carrier acknowledges and greets you with "here is your new, higher premium".

Wonder if this carrier would REDUCE her premium if the now deceased husband was a deadbeat credit risk while she had sterling credit?

Nah. That would require the carrier to have a heart.


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