Choosing the right insurance company is a risky task. There are a lot of things to consider such as stability of the insurance company, its reputation, the packages it offers and the premium you are required to pay. The premium fees should be justifiable by the service and benefits of the insurance packages. Others also consider incentives and bonuses. To better understand insurance policies, an understanding of the insurance system is a must. Over the years insurance related issues has been discussed. Here we will discuss the controversies related to insurance packages. Critics say that insurance companies provides only to a selected few. One of the much talked about insurance types are the life insurance. Insurance companies may be too discriminating as to whom they provide the insurance service to. Individuals whose job is considered hazardous or those who love to participate in “over the cliff” activities such as mountain climbing, paragliding, bungee jumping and free falls may be denied. On the other hand individuals who tend to live on the “safe side” are preferred even if these individual has a small chance of satisfying the conditions of the insurance policy. Insurance policies, being an agreement between the insurer and the insurance company, should be well understood. There have been instances wherein the insurer was denied of insurance benefits due to complex technical definitions. To ensure that this will not happen, regulating bodies have been established. These regulating bodies are to ensure that the insurance policy is understandable and transparent. Regulating bodies also standardized the way insurance policies may be marketed and sold. Redlining has been an issue sometime in the past. It involves insurance companies and their method of qualifying possible insurers. Redlining is the practice of explicitly denying insurance options in specific geographic areas. Although not all practice absolute deprivation of insurance services, having higher premium fees based on geographic location is also considered redlining. Critics have regarded redlining as a form of racial discrimination. In a country like the United States of America which has a long and controversial history of racism, this kind of discrimination is not acceptable. It is a known fact that insurance companies consider quantifiable factors in determining the appropriate insurance package. These quantifiable factors include the insurer’s location, credit history, current occupation, gender, education level, marital status and number of children. Critics have regarded these factors as unjust and discriminating. As a result, regulating bodies have enforced standards for determining premiums and insurance coverage. Premiums are based on the standards set by the regulating body. For example old people which are more likely to be stricken with health problems are charged with higher health premiums as compared to younger and healthier insurers. Even though issues and controversies may emerge involving insurance companies and its policies, it is still one of the best and most sought after financial security blankets. The actions of the regulating bodies help secure the neutrality of the insurance system giving priority to the improvement of services and increase in benefits. The information in this article has not been verified and should not be taken as financial, legal or any other type of advice.
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Choosing the right insurance company is a risky task. There are a lot of things to consider such as stability of the insurance company, its reputation, the packages it offers and the premium you are required to pay. The premium fees should be justifiable by the service and benefits of the insurance packages. Others also consider incentives and bonuses.
David Carlisle is author of this article on YouTube Car Insurance. Find more information about Home Insurance here.
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