Your Credit Score Gets Checked When You Apply For A Health Insurance

It doesn’t matter what kind of insurance you’re planning to purchase, the insurance companies can check your credit score.

Unlike banks or other loan providers, insurance companies check your credit history only so that they can make sure they can rely on you to pay your insurance premiums and checking your credit score is the best method to do that. However, if you are applying for a health insurance via a group plan, then your credit score won’t be reviewed, as group insurance schemes are usually available for anyone who belongs to the group.

Private health insurance, also known individual health insurance, you may be required to undergo a medical exam as well as your credit score being checked. Private health insurance is stricter than group plans, where ability to pay for premiums and health are concerned. If a group plan is sponsored by the employer, the premiums are deducted automatically from your paycheck, but for individual insurance plans you will have to make regular premium payments. As there is a certain kind of credit involved in the system, the insurance company can determine your riskiness and the subsequent premiums you’ll have to pay.

In addition, whether you can pay your premiums, health insurance isn’t concerned with your credit score. In case of group health insurance plans, the entire group is a buffer against defaulting on premium payments, but private insurance companies may incur losses should they approve an individual health insurance plan without ensuring that the insured person is a financially responsible individual.

In most cases, your credit score is checked just to be certain that you’re responsible with your finances. In other words, even if you have a credit score below 650, who won’t be denied for health insurance, but you’ll have to make higher premiums. This is done to offset the risk that you will miss or delay payments, not to penalize you for having a low credit score. If your credit score improves, then you can request your insurance company to review the policy and probably qualify for lower insurance premiums at renewal time.

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