Insurer stability and your China health insurance plan
Moving to China from abroad can be a chaotic time. You already have a lot to juggle when it comes to finding accommodations and personal effects in your new home, getting used to the local work and social culture, and much more. In other words, you have a lot to worry about in your own life, so the last thing you need is to worry about the problems of others, even the companies that you do business with.
Even so, there are a few businesses that we work with that we depend on in times of need. Perhaps the best example of this is our health insurance provider, as doing business with them is intended to protect ourselves and our families from burdensome medical debt that can cripple our savings accounts. So how do we know if our insurance provider is a company that we can truly entrust out livelihoods with? Here, Pacific Prime China delves into the topic of insurer stability, and how it applies to your insurance coverage.
Insurer stability overview
To start with, it is prudent to define what we mean by insurer stability. Simply put, the term refers to how fiscally sound an insurance provider is. From a policyholder’s point of view, the most important aspect of insurer stability is whether or not their insurer is going to remain in business into the long-term future. It is not unheard of for an insurance provider to declare bankruptcy, or otherwise go out of business, so people should care about this topic, as losing coverage due to choosing an unstable insurance company can lead to major problems down the road, which we will get into later in this article.
Choosing the right insurance is not just about addressing your medical costs this year, next year, or even five years from now. You will, no doubt, want to be insured by a company that you will be able to depend on when you need it most, which – for most people – is going to be in their golden years. This means that when you choose an insurer in your 20s, 30s, 40s, or beyond, you want to choose one that you will be able to stick with for decades.
How do I know a potential insurer is stable?
The top factor sited when it comes to identifying insurer stability is good financial ratings. There are many different agencies around the world that rate the financial stability of insurance companies; including ones you may have heard of like Standard & Poor’s, Moody’s, Weiss Research, Fitch Investors Service, A.M. Best Company, and more. While some of these ratings boil down to simply being opinions, they are still based on the knowledge of experienced professionals, with hard financial data figured in, leading to a forward looking statement on the likely financial future of a given insurance provider.
It should be noted, however, that financial ratings oftentimes do not consider available information related to customer service, product quality, or plan cost. Each ratings agency also has its own methodology for their evaluations, so consider the specifics of each before you make any decisions of your own. After all, it is possible that an insurance company – having been rated by numerous agencies – will put a good rating at the front and center of their marketing, while attempting to bury a poor one.
Risks of insurer instability
Even if you do end up insured by an unstable insurance company, what’s the worst that could happen? Well, let’s have a look:
- Loss of coverage – Imagine you are just turning 65, and finally at a point in your life where you feel comfortable retiring. Then you get notification in the mail that your insurance provider has come upon hard times and will be forced to close its doors. Not only that, without some other insurance provider picking up your insurer’s portfolio of clients, you will end up being left without any kind of health insurance coverage. All of a sudden, where you once thought you would be able to enjoy your retirement with the peace of mind that your medical needs could easily be addressed, you are now left to worry about being able to secure adequate coverage with a new insurance company.
- Pre-existing conditions – Utilizing the same scenario above, once a person loses their insurance provider and are forced to find a new one, they will likely find that the benefits of a new policy are not as comprehensive as those of their previous one. One area of concern here is any pre-existing medical conditions that the policyholder may have developed since the start of their previous plan. These are likely to be excluded in any new policy documentation.
- Age limits – Losing your insurance due to insurer instability can possibly make it difficult to secure health insurance of any kind depending on the age of the insured. Many insurance providers have maximum age limits on a number of their plans. Of course, if you are able to maintain a lifetime renewable plan with the same insurer from a younger age, this is a problem that you will not have to deal with.
- Loss of customers and subsequent negative effects – Even before insurer instability leads to a company going out of business, a perception of instability caused by a downgraded financial rating can lead to an exodus of clients. This, in turn, can weaken the income of an insurance provider and further exacerbate insurer instability. This can then lead to other issues like cutting corners, poor service, a lack of innovation, or large fluctuations in premiums and benefits.
Avoid insurer instability
All the above information should be cause for pause when it comes time to choose a new insurance company in China. The problem then becomes putting the information into action and identifying which, out of all available options, provides the best combination of insurer stability, plan benefits, and cost. With so many different companies and plans out there, though, finding the perfect plan can be a monumental task for a single person to accomplish.
Fortunately, there is help available. A tried and true insurance broker, like Pacific Prime China, has the knowledge of the local insurance market necessary to quickly and efficiently present you with the very best options for your needs. Simply let us know what benefits you want, what your budget is, and how important insurer stability is to you, and we can find a plan that is custom tailored for you, your family, or your business! Contact us today to find out more.