Dental Insurance Articles
How To Switch Dental Insurance Coverage Without Assessing Penalties
2010-12-31
When you switch your dental insurance coverage to another provider, you'll often enjoy better coverage and lower rates. Unfortunately, you may also have to deal with penalty assessment. Many insurers charge customers who cancel their policies early, but knowing about these penalties can help you to avoid them. Here are a few tips to keep in mind to avoid serious costs when you switch insurers.
Ideally, you should find out about penalty assessment before you buy any type of dental insurance policy in the first place. The first time that you shop for dental insurance, you should call insurance representatives and ask about penalties for early cancellation. Ask what the penalties are, and run through a few potential scenarios with your insurance agent to get the best possible idea of whether or not the policy is worthwhile. It should be noted that penalty assessment isn't always severe, and if your insurance company only charges a few dollars for an early cancellation, it may be worth the cost to use their company. This is particularly true if they're offering lower than average rates. However, you should avoid buying a policy if the risk of penalties will be significant enough to tie you to the policy, regardless of whether a better option is available.
If your insurance company charges penalties and you're set on switching your dental insurance coverage to another provider, there are a few things that you can do. First of all, make sure that penalty assessment is legal in your state. You can do this by contacting your state's insurance commissioner. If it's not legal for the insurer to charge penalties, consider registering a complaint with the commissioner. However, if penalties are legal, you'll need to contact your new insurer to see if they'll reduce your policy's premiums by the amount of the penalty for the first month. This effectively cancels out your early cancellation penalties, enabling you to switch policies easily (albeit with a bit of work).
Finally, make sure that you stay covered, as a lapse in coverage can be a penalty in and of itself at some point down the line. Talk to your new dental insurance provider and explain that you're switching from another insurer. In many instances, they'll contact your old insurer for you in order to make the cancellation easier and to avoid a lapse. Even a slight lapse can make insurance much more expensive the next time that you renew and can result in other complications, so do your research before you switch - you'll avoid major penalties and keep the coverage you need for good dental health.