Insurance World

A growing number of colleges and universities have instituted a new requirement-student insurance.

However, when they attempt to comply, some students find that the insurance plan offered by their college may be less than adequate or that they are no longer eligible for coverage under their parents’ health plan. Others find that their school is outside the HMO or PPO region or their parents’ plan.

An alternative is purchasing insurance coverage through a plan designed specifically for college students.

When selecting such a plan, it’s wise to compare the cost of a college-sponsored plan against other policies and to find one that’s really designed to fit a student’s lifestyle. You might be surprised to learn that a college-sponsored plan isn’t necessarily the most affordable or comprehensive coverage available. What’s more, the plan should accommodate travel and stay in place should a student transfer to another school. Also, the coverage should be in place year-round, not just during the school year, and be priced to fit a student’s budget.

Experts say one policy that fits these criteria is Student Select from Assurant Health. This permanent, renewable, individual medical insurance plan is designed specifically for college students under the age of 30. Students must be under the age of 30 when they apply but they can keep renewing the plan when they are no longer in college and keep it up to the age of 65.

Since the policy is not an HMO plan, you can visit the doctor or hospital of your choice. No referrals are needed, no non-network penalties are incurred.

The plan can be paid for on an annual or semiannual basis. The company offers two convenient payment methods of credit card or personal check. Both the annual and semiannual payment options are available with the credit card payment method.

If you are not satisfied with the plan, you can return the contract within 10 days of delivery for a refund. If a cancellation request is received after the 10-day period, a prorated refund will be provided as described in the contract.

Insurance policies work by taking premiums from customers in exchange for baring the risk of certain costly events occurring. For example, if there is one fire in your town each month, everyone could just sit tight and hope their house doesn’t burn down next, or could pitch in and pay an insurance premium each month and this is then used to rebuild the house that burns down. Very simply this is how insurance works. It is a method of spreading a risk over a far wider area, so that it will not be as devastating as if it was concentrated solely on the person who experiences the loss.

Exclusion Clauses

There are a few problems with this however and they attract much criticism. One criticism is that by taking on the risk for people, insurance makes people take greater risks than they otherwise would. For example, if you know your home contents are insured against burglary, then you may not be as careful about locking the doors and windows every time you leave the house. Or if your bike is insured, you may not bother to lock it as much as if it wasn’t insured. In the insurance industry, this problem is known as the moral hazard.

Insurance companies protect themselves against this by inserting exclusion clauses into their contracts, which remove their obligation to pay out if the insured performs or fails to perform certain stated actions. They might for instance require that you fit smoke detectors, or use good locks on your doors, or other things that will reduce the risk of the insured against event occurring.

Too Complex

There are also certain risks that you are not allowed to insure against in most countries. This is first of all because it would be too difficult for the insurance companies to quantify, but mostly it’s because they are risks that governments want the person at risk to bare himself or herself. They generally apply to multinational companies.

There is also the criticism that insurance policies are far too complex for the vast majority of consumers to understand. It is simply unreasonable to expect the customer to understand lengthy documents that have been drafted by not one, but usually teams of specialised lawyers. This can lead to consumers being misled or buying insurance policies on unfavourable terms. To get around this, most countries regulate the content of insurance contracts to ensure that they remain fair to consumers.

There is also the option of using the services of an insurance broker to shop the market for you.