Health companies each look at pre-existing health conditions differently. You need to know how they will treat any pre-existing conditions present among anyone you want coverage for. And always be honest when telling the agent about health problems and make sure he writes them on the application before you sign it.

There are also some popular misconceptions and misunderstanding you should become clear about. Getting the right health policy, the best major medical policy, and the correct disability income policy are your responsibility. No matter how much you blame your agent for selling you the wrong type of policy, it is still your problem. No matter what the results of your decision will benefit or penalize your family and your farm.

Once common misconception deals with co-insurance, the percentage that you must pay compared to what the company is required to pay. These percentages must be spelled out clearly and you should give them special consideration. The co-insurance relationship is essentially a risk sharing agreement between you and the health company. The higher the percentage you are willing to pay the lower your premium.

Other terms like "stop-loss" that put a cap on your total or annual obligation are important too. It makes sense to me to have enough money in the bank to cover our annual co-insurance percentage and leave it there earning interest until someone gets sick. And we add to our investment portfolio the difference between what we are now paying and what we would be paying if we had a lower coinsurance requirement.

A second misconception has to do with deductibles. This is an extension of the ideas above, where the more you ask the company to pay the higher the premium. This is not rocket science, a $500 deductible will cost a lot more that a health policy with a $5,000 deductible.

If you really want to cut your health policy premiums try a $10,000 or $25,000 deductible. Think about it this way, you can figure out a way to come up with the $10,000 per year but not the one million dollar hospital bill from a tragic illness. And the difference in premiums between the low deductible and a much higher one will save you enough money that you will be able to afford a much higher maximum benefit - which is what you need the for in the first place.

Here is the third of the key misconceptions, the co-pay percentages in the health or major medical polity for various medical services. For example if you expect your health policy to pay all but $25 of a doctor's visit or all but $5 for a prescription drug, you will pay a higher health premium that one that has you paying $50 per doctor visit and $15 per prescription. Again this is not rocket science. Better management of the co-pay relationship, deciding when it makes more sense to pay the nickels yourself and let the health policy pay the dollars will result in excellent savings for you, money that can be used to pay the bills you will never be able to afford on your own.

It seems like there are legions of people whose full time jobs are to come up with special words in a special language only they can understand. Even so we must try to figure out what these things mean so we can make the best choices.

And don't get yourself in the position of trading dollars with the companies. Low deductibles are a major cause of our health care crisis. High deductibles put the responsibility on us keep out of the doctors office, keep out of the drug store, and keep out of the emergency room unless we are really sick. We don't need health care reform as much as we need personal responsibility education and corporate incentives that pay people bonuses for taking better care of themselves.

Kenny is an experienced family business consultant and business coach who specialized in helping business owners and farmers understand the power of effective communications. Day to day decisions add up to create life long strategies so they are the most important ones any of us is likely to have. To have strategic conversations means to talk about what's important constructively so every decision takes you closer to your objectives. Click here for a free report that will help build your company's capabilities for a brighter future.

Here are some more insurance articles...