So I’m reading the news today and I discover an article about a father whose child needs additional medical care that his insurance company does not want to pay for.  Most people’s response is one of horror and anger and “this is why we should have ‘ObamaCare’”.  But some very interesting facts get omitted in the bombast and rush to judgment.

First, the insurance company is a Dutch insurance company, obviously headquartered in Europe.  As you have no doubt seen, heard, and read (ok, you’ve been inundated) there are tremendously stressful financial and economic issues going on in Europe these days.  We have one client who had a savings account at this same insurance company.  More than a year ago, we informed him of impending trouble, the foreign status is his provider, and suggested he move his money closer to home.

Second, anytime, no, make that EVERY time you buy insurance, you are making more than just a cashflow/premium/cost decision.  You are also “purchasing” a willingness and ability on the part of the insurance company to pay future claims.  In other words, if you buy the cheapest insurance without carefully considering the claims paying record and the finances of the company, you are likely to arrive at the place this poor man and child are, with no one to pay for ___________ (fill in the blank with whatever it is your were insuring).  This is one of the reasons we HATE doing insurance for people these days.  Frequently, the only concern for claims paying issues is after it’s too late – when the insurance company denies the claim.

Third, and finally, if you think private insurance companies are picky when it comes to claims, just wait until you have a government administered “insurance” program.  In Canada or the U.K. it would be three more months before your daughter was able to see a doctor, and if your European insurance company is able to deny claims under U.S. law, what do you think the Canadian or British government run program would do?

Insurance is a present cash flow matter, it’s a risk management concern, and it is a claims paying and financial strength issue.  Ignore risk and you end up broke.  Ignore things you can do to reduce risk and pay too much.  Ignore the cost and you can’t afford it.  Ignore the claims process and you pay something for nothing.  Instead, make informed and comprehensive decisions…perhaps even hire someone of integrity who can assist in these matters.