Merritt Personal Lines Manual: Chapter 2 Applying for Insurance

To get an accurate quote for health insurance, you will have to fill out an application. It's very important that you do this completely and correctly. If you lie on the application, the company can not only deny you coverage for a problem down the road, it can rescind the policy entirely. And, most companies can get your medical information anyway through a non-profit association called the Medical Information Bureau (MIB).

The MIB was formed in 1902 by a group doctors who were also medical directors at several, large insurance companies. Because their companies had lost significant dollars to dishonest applicants, they sought a means to centralize health related information on individual applicants and reduce the potential for fraud, hence the birth of the MIB.

Today, the MIB maintains medical information only on approximately two out of every 10 applicants for health, life or disability insurance. That's because only those applicants with significant medical or longevity conditions are required to be reported to them by the 750 or so member companies. And, medical conditions are reported by the use of a series of codes a total of about 210 which means there is a good chance for errors.

Before you apply for insurance, it might be a good idea to check if there's a report on file for you, it's at no charge. And, if there is one and it's wrong, you can correct it.

Just telephone them at (617) 426-3660 and ask for your free report.

The application for health insurance also will ask for your age and health history. Most insurance companies will ask your doctor for your medical records and they may require you to undergo a physical with one of their doctors or even get additional blood tests. (However, they cannot conduct an HIV test, except if you are also applying for life or disability income insurance and then it has to be with informed consent.)

Completing the application, you will have to let the insurance company know about pre-existing conditions. The company will want to know what illnesses and health problems you have had during the last couple of years (possibly longer). Most insurance companies would prefer not to pay you for treatment for a pre-existing condition, such as an ulcer or a gallstone. However, they are usually required by law, to cover pre-existing conditions eventually usually after six months to a year.

An insurance company also may restrict certain benefits for a set period of time. For instance, it may not cover expenses related to a pregnancy until the coverage has been in effect for one year. If you're already pregnant, this would be treated as a pre-existing condition. So, if you're planning on becoming pregnant, you'll want to get your health coverage sorted out as far in advance as possible.

If you've had a serious pre-existing condition, such as cancer or a heart attack, an insurance company may not want to issue you coverage at all. Or it may require you to sign a waiver. This is a rider or amendment to a policy that restricts benefits by excluding certain medical conditions from coverage. (However, some states have begun to prohibit this practice.)

Your age also is an important factor in pricing and obtaining insurance. Many insurance companies have age "bands," when it comes to costs for coverage. For instance, everyone age 21 to 25 may fall into one price range and everyone 26 to 30 would cost a bit more to insure each month.

Insurance companies prefer to write policies for young, healthy people and they prefer to stay away from older, less healthy people. So, it pays to pick a good plan when you're relatively young and stay with it, if you can.

Some companies allow you to change your mind and get your money back after you purchase health insurance but only if the policy has a "free look" or review period, which typically ranges from 10 to 30 days. So, you'll want to read your policy as soon as you get it.

You may even want to ask your pharmacist and your doctor how different plans are handled before you sign up. They should be more than happy to tell you which companies and which plans are easy to work with and which ones make life difficult for them and for their patients.