Monday, February 28, 2005

I’m in perfect health, so why was I declined?

Recently, I had occasion to speak with a client who was unhappy with his coverage [ed: nooo! really?!]. This gentleman owns his own business, and has had a policy with Company F for a number of years. The plan has a high deductible, and no frills. It covers this gentleman and his family for a little over $900 per quarter.
He called me a few months ago to see if there was anything we could do to lower his premium without lowering his benefits. I looked around, and found nothing that would do accomplish his stated goal. He was not happy with this report, but there was nothing I could do about that. The quotes are the quotes.
Last week, he called me back to complain that he had been declined for health insurance. Excuse me? It seems that he had contacted (or been contacted by) another agent, not affiliated with our agency, but who also represented Company F. This agent told the client that Company F offered a plan with benefits he did not currently have, at a lower premium. The client applied for this new plan, and was declined by Company F due to his elevated blood pressure [ed: on its face, this seems an unlikely reason for declination, but inasmuch as I had nothing to do with this application, I’ll never know the true reason].
The client was outraged, so naturally he called me. Or rather, he had his wife call me. I spoke with her, and then did a little more poking around (I realized at the time that this would most likely be a waste of my time, but one does try to accommodate one’s clients). Again, I found nothing that would maintain or improve his coverage without an increase in premium,. In fact, I ran the numbers with Company F (his current carrier) -- the plan which the other agent had touted as a significant increase in benefits and decrease in premiums – and it actually cost over $2,500 per quarter, and that assumed a preferred rate classification.
As you may imagine, this did not go over well with the client. According to his doctor, his blood pressure was fine, and he was in exceedingly good health.
Now, it may be that the doctor was lying.
It may also be that the insurance company was mistaken.
But what is more likely is that they were both right: The physician sees a patient, about whom he cares, and whose health he is reasonably certain can be managed with (presumably) a minimum of hassle. He sees no major or imminent problems, and because he knows the patient on a personal level, is confident that things will “be fine.”
The insurers, OTOH, sees a potential claim. The company doesn’t know this client on a personal level – whether or not he is a current insured notwithstanding – and assesses the risks of insuring him based on the experience of insuring thousands of others like him.
It’s nothing personal.
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