Being an insurance agent myself and running a company at one time I thought I'd mention a couple of things about insurance. First of all, it takes a group for this concept to work. One person cannot do it alone. You need money from several people to join in all their monthly funds in the hopes that no one actually uses their insurance. Lets take for example everyone pays $50 a month for car insurance. You have ten people on the plan. That is only $500. If someone totals their car in the first month, the insurance company is in the hole right off the bat. When the idea of insurance came into play, the idea was for everyone on the plan was to "pay" for insurance, a kind of saving account for a rainy day. This goes the same for health and life insurance. No one can afford a $50K surgery or a $150K death benefit. But you can if you pay only $30 or $50 or more a month at a time. Still, each is suppose to pay their way and then if they need the surgeries or a car repaired, or their family taken car of if they die, they use someone "else's" money, because they "paid" into the plan. Now, people seem to want to pull out of the Government for free, without paying into the plan, does this make sense? And whose money and where does anyone expect it to come from? With healthcare costing billions a pop, I don't think people are thinking clearly when non one wants to pay in. Something else needs to happen. Employers need a break in taxes or something so they can afford to give their employees a break and better benefits. Individuals need better more affordable plans that we can buy. I don't think taxing is going to work, what do ya'll think? I sold AIG insurance, they tried what the Gov't is trying, selling cheap insurance to many, look what happened. Lost
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alivenwell351
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Jul 9 @ 2:41PM
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Part of the problem with health insurance cost is that over time it has transformed from something to offset major medical costs to something that co pays every little thing.
Imagine if auto insurance was run the same way...co pays for an oil change...tune up...new brakes or shocks. Imagine what your auto insurance would cost then.
Also imagine the reduction in cost, if health insurance was to go back to the way it used to be, and people payed for their medical "oil changes"....
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Mission_Impossible139
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Jul 9 @ 4:11PM
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There are several problems here. First, health care should not be based on he bottom line. Corporate executives are telling the doctors what to do and how to bill. It has nothing to do with the patients welfare it has to do with cutting costs so people can make money on the stock and the execs can make big bonuses. Since a very few big insurance companies control all the access to health care, they set the standard for raping the public. They, of course, want just the healthy in their system. So, they will refuse coverage to those who have pre-existing conditions. There is a huge list as to why these rapists have been the scourge of our health care system and why we do not have the best care in the world. Unless of course you are a congressman.
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mike105
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Jul 9 @ 4:33PM
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Some of the biggest buildings in Manhattan are owned by insurance companies. Thats the bulk of your premiums.
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blue130160
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Jul 9 @ 6:41PM
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My son is thinking of moving out of the country cause you need insurance for everything here.. So go with the government plan . If privet is better. People will buy it to proved it for there employees
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rogueknight
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Jul 9 @ 6:52PM
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While all that you say is true, you didn't go far enough into the issue to address the problem many people have with insurance companies.
For instance, premiums are not held in limbo, awaiting a time that they are needed. Just like any business, there are expenses and overhead that are deducted from your premium. There is a calculation method that for every dollar received as a premium, xx% is used for that overhead and expenses in the costs of doing business. Then, what's left over, is used in various methods of revenue increase. Depending on the particular insurance type and agency, this could be stocks, bonds, high yield intersest bearing accounts, sister corp loans, etc. Makes logical sense...invest your dollar to make $1.10.
My brother works for a large insurance company, and he told me last year that in 2007 the company profited $287 million, and had expenditures of $318 million, but still showed $46 million in revenue profits from investments. All insurance companies do this.
The problem comes in when you get a group at the top that is greedy, and make things unreasonable. Like the auto insurance companies. Since it is now mandatory in every state to carry some type of auto insurance, every single driver is required to pay auto insurance by law. So they raise premiums, and put stricter guidelines to obtain a policy. If you can't meet their requirements, then they hope you will get one of the smaller pay-by-the-month agencies (which are actually owned, by the way, by the major companies!), and you pay more than you would have, except it's broken into monthly payments instead of 6 month lump sum payments. So do the math. Make it simple and use your state. Take the total number of drivers in your state, multiple by the average premium. To be generous, utilize only 15% of that as equitable revenues to claims (it's MUCH more than that, I assure you!). Take the average number of claims in your state and deduct that. See how much you have left over. And that's not even accounting for interest they will be making.
Medical and life insurance is much the same. You pay more for medical, because of the expense and frequency of claims. Life is very lucrative, because you only claim on life insurance in the event of death. You pay premiums for 40, 50 years or more, and all those premiums are retaining interest over the maturation period of the policy.
I agree, we need to have insurance. It's a necessary evil in life. But there are ways to ensure everyone receives insurance without gouging then. The average family that pays life, health, medial, dental, vision, vehicle insurance pays over $400 a month. Wouldn't it be more logical to have an umbrella coverage for everything for less than half that?
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TroutFishing
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Jul 9 @ 9:46PM
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Thanks ImLost, for attempting to shed some light.
Unfortunately, facts never get in the way of people's opinions and their
need to accuse businesses of being in business to fleece the public.
I applaud your effort but I am not surprised at the comments.
  
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imlost2
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Jul 10 @ 8:56AM
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Thank all of you for commenting, I am going to try to address some of your questions here. Some of the problems with rates are fraud. Some people make claims that their houses and cars were broken in to and claim items were stolen and get them replaced for free. I've seen it happen. My own contractor that ripped me off did that with his tools (I'm sueing him because I gave him money to work on my home and he never came back), He sold his tools, claimed they were stolen, collected money both ways. I have also sold a policy to people who have made only one or two people then the car was stolen or smashed up and they got a new car out of the deal. Then I heard later the car's engine was knocking or transmissioin was going out anyways. So these things sound kind of suspicious. So out of lets say $100 worth of payments the person gets a $4000.00 car. Those types of fraud makes your payments higher. I've seen people have leaky roofs but wait until a storm to make claims and say the storm did it, or smash their car themselves and say someone hit their car in a parking lot, some we've caught because of cameras in the parking lot at the stores. And we have proven their story wasn't true. So I understand what you all are saying, but this drives rates up. On the other hand, I've seen one lady just buy a accident, health policy and make one or two payments and require an emergency gallbladder surgery a month or so later, it paid out over $150K for her, she was lucky, plus it paid $500 a day cash in her hand. Now what would she have done if she hadn't gotten that policy? Insurance is to insure you and your family is taken care of in case something happens. Sure they make money, but they pay out Billions. They not only pay out to those who need it, but pay out to people who are frauds as well. If everyone was honest, the cost would be lower. You can also shop around, which I suggest, prices vary. Many places will give you a discount if you buy life insurance along with your car insurance. Or if you are insuring a teen, if they watch a video and have good grades you can get a discount etc. The problem with states making you have insurance is because of the uninsured, people don't want to be responsible, if you get in an accident and it's their fault, who pays for your car? Not only that, who pays for the hospital bills if someone is hurt? What if you don't have health insurance? This provides for hospitalization. It's a shame I know but like one said necessary evil. My point in this blog was that we cannot expect nor take from the Government to pay for everyone to cover this expense. Everyone must chip in as there are too many not paying their fair share, it will break the Gov't. Lost
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