How Can You Tell if a Health Insurance Company Is Legit?

Buying a bogus health plan can be financially catastrophic and leave you unprotected if you become seriously ill. But how can you tell if the health insurance policy your buying is legitimate? As a rule, health insurance companies touting plans that offer low deductibles, low premiums or say "no physical required" in their applications are probably too good to be true, according to the National Association of Insurance Commissioners. To protect yourself against insurance fraud, the NAIC recommends vigilantly researching your options before you buy.

Instructions

How You Can Tell A Health Insurance Company Is Legitimate

• 1

  Verify the provider before signing any paperwork or submitting payment. Start by contacting the Department of Insurance in your state to see if the company has filed the necessary paperwork and is licensed to do business there. If you need help finding information about the company, consult the NAIC's Consumer Information Source. Experts there can assist you in reviewing the company's history in filing claims and financial information.

• 2

  Check the NAIC's online fraud reporting system for any complaints filed against the company. Other online sources to check include the Better Business Bureau and Yelp.com

• 3

  Review the policy's explanation of benefits. Even if the company is licensed to sell health insurance in your state, it still may be peddling a junk policy. Avoid plans that fail to list a maximum out of pocket cost, plans that have coverage limits that cap out at less than $100,000 or those that do not cover important things like prescription costs or chemotherapy.

• 4

  Compare the health policy with other comprehensive insurance plans found online. An e-insurance broker can help you compare costs and benefits. Avoid plans that offer premiums much lower than the competition because they probably don't cover much, according to the NAIC.

• 5

  Report Fraud. If you suspect you have been a victim of insurance fraud, report the company to your state's Department of Insurance and file a complaint with the NAIC's Online Fraud Reporting System.