How to Avoid Insurance Scams

A friend of mine received a fax recently that claimed to offer affordable health care plans. A first glance immediately raised my suspicions. It just looked like one of those flashy car advertisements found in newspapers, offering a ridiculously good deal with "Save $50" surrounded by a jagged shape.

Don't ever give out your credit card information-or any personal information for that matter-unless you are 100% sure you are talking to a legitimate company. Scamming is rampant nowadays and can be through mail, fax, phone, or in person.

Pay Attention & Do Your Research

Pay careful attention to all words (especially the details), or the lack thereof. Note any evasiveness. Look for any loopholes and do your research. Ask others and look online to hear what others have to say or have said about it.

Pressure Technique

One important thing to watch out for is the pressure technique. Right above the phone number read, "Reduced rates end Friday, Jan 9"-which is the day I received the fax! This way, people are more likely to fall victim because they have less time to do research. Off to the side of the paper, it said, "Last Day to Save $50 A Month," which means they knew we would receive the advertisement on the last day.

Unprofessionalism

When my friend called to inquire about the plan, they lead her to a website, www.alrenrollment.com. (ALR stands for "Association for Lifestyle Reform.") The site is uncharacteristically simple. The tab of the site simply says "website." Look out for unprofessionalism and spelling mistakes-although it obviously won't always mean it's not a legitimate site. Not only was the logo for ALR unprofessionally done, with the holes in the "A" and "R" looking choppy, right on the front page, they spell "specialists" incorrectly-which is unlikely for a site that supposedly has been around for a while. Not to mention, the advertisement repeated "No waiting periods" twice under its list of plan benefits.

Oddities

At first I overlooked the $300 gas rebate they offered on the homepage because I mistook it for an advertisement, but then realized it said, "Click here to get your certificate," which leads you to a page that congratulates you for the certificate, asking you to enter your email address to receive it, compliments of ALR. What kind of insurance company-affiliated site gives you gas rebates?

Also striking was how there was no insurance company to be found anywhere on the advertisement, and we were lead to a website that claimed to not be an insurance company. And "insurance" wasn't mentioned once on the paper.

Too Easy and Too Cheap

Pay attention to strange, seemingly too-good-to-be-true offers and deals. The plan offered enrollment for $199 monthly for a single person for a whole list of benefits, and doctor visits would only be $25. And no medical exams necessary! If it seems too easy and too cheap, it probably is.

Verify Licensure and Legitimacy

This is a must. Don't believe them if they say they're exempt from a state license. Contact your state insurance department to ask about the insurance company if necessary.