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Your Insurers Are Not Necessarily Your Friends

March 1997

If you are living with HIV, you know that life, health, and disability insurers are not your best friends. Let's face it: they probably don't like you (it's nothing personal; it's just that they tend to focus on the financial losses they may anticipate will result from insuring you, as a person living with HIV), and you may like them even less. Nevertheless, the reality is that you are going to have to learn to put up with each other, and your dealings with your insurers are more likely to be successful if you have taken the time to understand the basics of the industry.

No one can take insurance coverage for granted, but for those living with HIV or other chronic health conditions, good insurance can literally become a lifeline. Health insurance gets you access to medical treatment how and when you need it, disability insurance helps to cushion the devastating financial blow if you become unable to work and lose your income, and life insurance promises to help smooth the financial path of those you love in the event of your death. Each form of insurance, if you think about it, is precious and can potentially play a vital role in your well-being.

The problem, however, is that each of the above coverages requires you to depend on, and deal with, insurance companies. The more clearly you understand the exact nature of your relationship with your insurers, and that they are not necessarily your friends, the better off you will be. Insurance companies are happy when you are happy, to the extent that that does not conflict with their essential purpose and reason for being: making money. If you appear to fit into the category of one whom they see as potentially costing them money, i.e. if you are ill or disabled, look out. That's when things can start to get really nasty.

Beware of the mental confusion that can result because of the "warm and fuzzy" and intimate nature of the promises made by these insurers: to see that you get medical care if you get sick, to help you out financially if disability puts you into a bind, or to help out your loved ones in the event of your death. Making an effort to keep your vision clear, understand that the insurance business is not based on kindness, morality, or the "right thing." Your needs are only one part of the picture. Rather, insurance boils down simply to a matter of contract: your insurers have undertaken a legal responsibility to do certain things for you, as specifically defined in your policy, in return for your payment of premiums. Insurance amounts to nothing more and nothing less.

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Paranoia is not necessary, but it can be very dangerous to get lazy and to rely on insurance companies to keep you informed as to what your rights under your policy might be, and how and when to exercise them. The insurance company has its job to do, and you have yours. If you start to blur those boundaries and to look at your insurer as a surrogate "mother," or as anything other than what it is, you may be asking for trouble. Realize that in order for the system to work properly, you must be the advocate for yourself. Don't count on anyone else being there to do it for you.

Let's start with the basics.


Start With Your Policy

No matter what kind of insurance you may be concerned about, start with reading the policy. Somewhere along the way, most of us pick up the idea that we need "read the directions only if all else fails." That principle might work sometimes, but in the context of insurance it can lead to disaster. Yes, insurance policies can be intimidating, as they are often drafted by lawyers and insurance professionals and are therefore full of legalese and specifically defined industry jargon. Even I, a highly skilled lawyer, sometimes find my mind going blank when confronted with the mind-numbing language of insurance policies (contracts.) Nevertheless, follow my example as I pore over the policy, carefully read through its "definitions" section, pick up a dictionary and use it, try and try again if I just don't get it the first time, and then seek help or another opinion if necessary.

By failing to understand your rights as an insured, you are implicitly trusting the insurance company to be protecting your rights. Dealing successfully with insurance companies is not as easy as simply reading and understanding your policy (as if that were simple!), but that must be the first step taken as you try to understand your rights. Failing to do so is analogous to entering a minefield without the benefit of a map that has been offered to you. Serious damage can result.


Learn About Your Rights

On a related point, it is key that you take the time to learn about and to preserve any rights you may have to keep your insurance coverages in place even if you leave your job. Too often, people unnecessarily lose the health, life, or disability coverage that might have been open to them because they are ignorant of their rights. Such losses can be especially devastating for seriously ill or disabled people forced to quit working. Even though employers are legally obligated to inform you of certain rights involving the extension of health insurance coverage, they often fail to do so. (And they are not generally obligated to inform you about any rights you might have to keep your disability or life insurance in force.) Sometimes they don't know any better, and sometimes it's intentional. From the perspective of their bottom line, they are better off without you, as your heavy claims experience may raise the cost of the coverage to the group. Don't take it personally. Just protect yourself.

In a nutshell, you need to be aware of the following. First, state and federal COBRA laws guarantee you the right to remain covered as part of your employment group for certain fixed periods of time even though you have left your job or otherwise no longer qualify. (18 months generally, 29 months if you leave your job because of disability, and 36 months if you no longer qualify as a dependent, as a result of divorce or otherwise.) During the extension of coverage, it remains your responsibility to pay the monthly premiums for your coverage. If you have AIDS and meet certain financial criteria, help may be available to you in paying those premiums through programs administered by your state. Call your state's AIDS hotline, or an AIDS services organization near you, for more information. If you don't know those numbers, call the CDC National AIDS Hotline at (800) 342-AIDS. (The CDC's Spanish language hotline number is (800) 344-SIDA.)

As to your life insurance, explore any rights of conversion that may be open to you. If you are covered through your employment group, you may have a right to convert your policy to an individual one and to take it with you. If you are HIV positive or otherwise uninsurable, your life insurance can be an extremely important asset. Don't let it slide. Be aware that some extremely tight deadlines might apply for you to exercise these conversion rights. If you need help paying the premiums, see if you can work a deal with friends or family. Be creative, because you may be able to sell your life insurance policy, and that's like money in the bank. Keep your options open.


Part 2

As we began exploring in Part 1, life, health, and disability insurance can each serve a vital role in your future. If you ever need it, each type of insurance can make a major difference in your quality of life and in your well-being. Always keep clearly in mind, however, that your insurers are not there to be your friends. They are in business for one reason only: to make money.

Despite the "warm and fuzzy" commercials full of images of good neighbors, friends, and family, insurance companies are primarily motivated by their bottom line. If you have HIV or any other chronic illness, or if you otherwise fall outside of the insurers' profile of an ideal customer (that is, one on which they can make tidy profits), a heavy burden is placed upon you to protect yourself. Many have learned the hard way that things can ugly, very quickly, once an insurer has marked you as an undesirable risk.

As we discussed last time, you must first begin by carefully reading your policy, and taking the time to learn about and understand the precise nature of the obligations the insurer has agreed to undertake on your behalf. If you have not taken this first step, you are literally wandering around in the dark, trusting that the insurer will look out for your best interests. That can be an extremely dangerous risk to take.

While paranoia is not necessary, realize that the burden is yours to make sure that you get your due under any insurance coverage you have in force. Try and walk the fine line: do not be hostile to your insurers and their employees, but do keep your eyes wide open as you deal with them. Your dealings with your insurers need not be adversarial, but do not be surprised if things take that turn at some point in the future. To the extent you have taken the time to understand your rights, and developed clear communication with your insurers, you have lessened the probability of an insurance "meltdown" leading to crisis.

Here's the first simple tip you should follow. Document on an ongoing basis any dealings you have with any of your insurers. Open separate files for each kind of insurance you have in force, and save every piece of paper you receive from them. Further, especially with regard to your health insurance, think about keeping a journal documenting the dates and times of each conversation you have had with the company, as well as the names of the people you have spoken with and the substance of each conversation. If you are among the growing number of people covered through managed care organizations, make sure to document that your insurer has approved a proposed medical treatment and found it to be "medically necessary."

Be aware that, at times, insurers have given verbal authorization to proceed with a given medical treatment only to later deny payment for the bills incurred. If you have any doubts at all as to whether any given medical procedure would be covered under the terms of your policy, your best bet is to get authorization in writing from your insurance company. Keeping a journal, as described above, can be useful and is a good secondary strategy.


Keep Those Premiums Paid!

As we discussed last time, your relationship with your insurers is nothing more or less than a matter of contract. In every case, the insurer's duty to make payments on your behalf is conditioned upon your promise to make premium payments as called for in the contract. If you fail to live up to your end of the bargain, and pay those premiums, the coverage will lapse and the insurer will have no further obligation to you. Depending on your situation, that can amount to disaster.

Think about it: if you become ill or injured, you will have more need than ever for your insurance coverage. Unfortunately, however, you are likely to be under financial pressure during exactly such times, and more likely to fail to pay premiums and to let the policy go. If you are an undesirable insurance risk for whatever reason, your insurers will not shed a tear if you fail to pay your premiums as required. They will simply take the money they have received from you over the years and run.

Thus, it becomes your responsibility, and yours alone, to make sure that your premiums are paid on time as required under your policy. Take the time to calendar the due dates for any insurance coverage you have in force. Typically, most policies contain a grace period, giving you an additional thirty days (check your policy on this) after a premium's due date to keep the coverage in force. If the insurer does not receive the payment within that time, however, you may be out of luck. Even though some policies contain "nonforfeiture" provisions allowing you to have the policy reinstated under certain conditions, you must often provide "evidence of insurability" acceptable to the insurer first. If you are HIV positive of have any other health condition, you will be out of luck.


Don't Let This Happen to You

Lapse of life insurance coverage is a problem generally, and is especially a crisis in the HIV community. In spite of recent treatment advances, the viatical industry (the companies the buy life insurance policies) is still going strong, and if you have HIV a life insurance policy can be like money in the bank. It can be tough to keep those premiums in force, but be creative and do it somehow. And calendar those due dates! Please don't let this happen to you:

Frank has been HIV positive for several years. For years, he had kept his $200,000 life insurance policy in force with plans to viaticate the policy if he became disabled. The premiums on the policy were due annually. When he decided it was time to proceed with the sale of his policy, he quickly learned from the viatical companies trying to verify coverage (a standard step in the procedure) that the policy had lapsed due to his failure to make the payment in 1995. Panic stricken and horrified, he checked his checkbook only to find that he had forgotten to pay the $150 annual premium due the year before.

Frank, an extremely organized person and an excellent record keeper, could not understand how this could have happened. When he contacted the insurance company, he was informed by them that a premium notice had been sent out, as well as a second notice and a final notice. Frank had not received any of them. Thus, he concludes that the insurance company had somehow been alerted to his HIV status, and had intentionally failed to mail out the premium notices. Otherwise, he feels certain that he would have received at least one of the three notices allegedly sent out.

Frank has learned the hard way that people who really need them simply cannot depend on the insurance companies to protect their interests, even with regard to the basics. Please: learn from his lesson that you must take charge in every way of your relationship with your insurers, and protect yourself. Start by calendaring the due dates for any premiums due, as well as any applicable grace periods, and make sure that those payments are made on time. You have no other choice. Think seriously about making simple arrangements to have those payments made by someone you trust in the event you are too ill to think about it, and giving him or her access to at least some of your savings for that purpose.

No matter what your situation, you can protect yourself, but that burden falls on you and not your insurers. So please do it!



  
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This article was provided by Paul Hampton Crockett, Esq..
 
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