Doctors deal with insurance regularly, whether it's handling claims for their patients or managing their own coverage. Naturally, doctors tend to have a deeper understanding of insurance compared to the average person. Logically, they should be better at choosing the right insurance to protect themselves.
Having sold numerous insurance policies, including to doctors, I can confidently say that while doctors excel at treating illnesses, I excel at understanding insurance. I know how to leverage insurance to provide protection better than most doctors. I’ve even helped doctors make the right insurance decisions.
This story began during an impromptu lunch with Dr. Wong, a physician I frequently dined with. Over lunch, he shared that his father’s health had recently deteriorated, prompting him to consider reapplying for insurance. He sought my advice on this matter.
Anyone who has bought insurance knows that submitting the latest medical report to the insurance company is mandatory. Dr. Wong had his father undergo a medical exam, which revealed slightly elevated cancer markers in the blood test. To avoid potential complications and denial of coverage, he considered withholding the blood test report. From his professional experience, he had seen many cases where submitting a full report resulted in insurance denials. He hoped I could facilitate the process without submitting the report.
In finance, there’s a crucial concept called information asymmetry, which occurs when one party in a transaction has more or better information than the other. In market activities, those with comprehensive information are typically at an advantage, while those with less information are disadvantaged.
Failing to submit the blood test report constitutes information asymmetry. If the insurance company discovers this when processing a claim, it has the right to cancel the policy and deny coverage. Dr. Wong had seen many cases where honest submissions led to denials, and instances where non-disclosure led to coverage. However, he hadn’t witnessed scenarios where non-disclosure resulted in policy cancellation at a critical moment of need.
We often hear stories of people whose insurance policies were invalidated when they needed hospital treatment. Insurance companies are often criticized as heartless and unethical. Some argue that missing one report isn’t a big deal and that it’s unfair. At such times, the insurance agent who sold the policy often goes silent or even becomes unreachable. This is because the agent initially advised against submitting the medical report, leading to information asymmetry.
Understanding this, Dr. Wong decided to submit all medical reports. While awaiting approval for the new insurance, I advised him not to cancel the old policy, especially since the new one wasn’t yet active. Fortunately, he heeded my advice, which proved crucial later.
As expected, the insurance company required Dr. Wong’s father to undergo further examination by a urologist to investigate the abnormal markers. At the urologist’s office, the specialist suggested that elevated cancer markers don’t always indicate a serious issue and advised against submitting the report to the insurance company. While well-intentioned, this advice would expose the client to unnecessary risks in the future.
In the end, Dr. Wong completed the process, and further tests revealed that his father had early-stage prostate cancer, leading to the rejection of the new insurance application. However, because Dr. Wong didn’t cancel his father’s old policy, it remained valid and could be used for the necessary surgery.
Buying insurance isn’t difficult, but selling the right insurance is. Insurance is about responsibility. From the moment you pay, I bear the responsibility to ensure you can use the insurance when needed, without rejection. Proper preparation might not guarantee success, but it can bring hope when you need it most.