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Why Insurance Companies Are a Major Let Down: Understanding Denials and Finding Solutions


Health insurance is supposed to provide peace of mind, assuring us that when we need medical care, we won't be financially devastated. However, a closer look reveals a disheartening reality: insurance companies frequently deny coverage, leaving individuals and families grappling with massive medical bills. In this blog, we'll explore why insurance companies can be a major letdown, focusing on health insurance denials, rising auto insurance premiums, homeowner's insurance woes, and the complexities of life insurance policies. We'll also discuss potential solutions for those facing financial challenges due to insurance issues.

1. Health Insurance Denials:

Health insurance denial rates are a cause for concern, with averages around 17%. Some insurers even deny up to 49% of claims, leaving policyholders in a precarious situation. Often, these denials occur for seemingly arbitrary reasons, such as claims being deemed "not medically necessary."

One example is Dean Peterson, who was preapproved for a heart procedure to treat an arrhythmia but had his claim for necessary injections denied. Similarly, a newborn's intensive care stay was denied because they were breathing on their own, despite being only on a bottle. Such denials can result in exorbitant bills, as seen in the case of a teenager who faced a $5,000 bill after being saved from an allergic reaction in an emergency room.

Many denials stem from shifting contracts with drug manufacturers, and challenging these denials can be incredibly difficult for patients and doctors alike, particularly for larger claims.

2. Auto Insurance Premiums:

Auto insurance companies don't fare much better in this landscape. While driving without insurance is often not an option, policyholders find themselves facing annual premium increases. In 2015, Allstate found itself entangled in a class-action lawsuit, leading to a subsequent investigation by California's Insurance Commission. Shockingly, expert testimony in February 2022 revealed that the company had overcharged some policyholders by nearly a billion dollars.

Consumer watchdog groups have valiantly attempted to reverse Allstate's requests for yet another round of premium hikes. Instead, they have advocated for a refund of the COVID-related premiums the company collected. Unfortunately, the prospects for receiving these refunds seem dim. This situation raises questions about the decision-making process, which appears to benefit insurance companies disproportionately.

To understand this further, one need only examine the independent expenditures, often channeled through PACs (Political Action Committees), that flow into the campaign coffers of our government leaders. There are concerns that the insurance industry might be secretly funneling campaign donations to support specific candidates, without disclosing these contributions. This alleged "money laundering" is deeply troubling, especially considering the commissioner's promise to enhance transparency and fairness in the insurance industry.

3. Homeowner's Insurance:

Homeowner's insurance companies are gradually exiting the California market to protect their profits. Companies like State Farm and Allstate have either ceased offering new policies or steadily increased premiums while adding exclusions. Rural and semi-rural residents often receive non-renewal notices, leaving them with no choice but to opt for California Fair Plan coverage, which can cost around $5,000 a year.

4. Life Insurance:

Life insurance policies, especially term policies, face challenges. A Penn State University study indicates that 99% of term policies end up lapsing or expiring without ever paying out. Over 50% of Americans have some form of life insurance, but the cost of premiums is a significant deterrent.

In a comparison between investing money with a 5% annual return and paying life insurance premiums with a 2.5% return, the difference in returns is substantial. Many people are reevaluating their life insurance needs, given the cost and the likelihood that term policies may never pay out.


As insurance costs rise, individuals must find ways to manage their expenses effectively. Here are some potential solutions:

1. Health Insurance: Seek guidance from patient advocates or legal experts to challenge unjust health insurance denials. Knowing your policy and understanding your rights can be crucial.

2. Auto Insurance: Compare quotes from multiple insurers to find the best rates. Consider raising your deductibles or opting for usage-based insurance programs if you're a safe driver.

3. Homeowner's Insurance: Explore options with different insurance providers and consider bundling your home and auto insurance for potential discounts.

4. Life Insurance: Evaluate your life insurance needs and explore alternatives, such as term-to-permanent policy conversions or selling your life insurance policy to a third party for immediate cash.


Insurance companies can indeed be a major letdown, with health insurance denials, rising auto insurance premiums, challenges in homeowner's insurance, and the complexities of life insurance policies. As economic pressures increase, individuals must assess their insurance coverage and seek ways to manage their expenses effectively. It's essential to be informed, consider alternatives, and, in some cases, seek professional assistance to navigate the complexities of insurance. Remember that insurance should provide financial security, not become a source of financial stress.

**Editor's Note:** In addition to the solutions mentioned above, there are specialized services that can further assist individuals facing insurance-related challenges. ULS Life Settlement and UFS United Financial Services are two such companies that offer valuable support.

ULS United Life Settlement – Maximizing the Value of Life Insurance Policies:

For individuals looking to explore alternatives to their life insurance policies, ULS United Life Settlement specializes in finding the highest bidder for your policy. In some cases, they offer payouts of up to 80% of the entire policy benefit. Life settlements can provide immediate financial relief and flexibility, allowing policyholders to access the value of their policies when they need it most.

UFS United Financial Services – Financial Guidance and Support:

UFS United Financial Services is a sister company that can help individuals assess their financial situation and explore options to lower expenses. Their expertise extends to various financial solutions, including low to no-cost home equity loans, home equity conversion mortgages, first mortgages, and comprehensive support for the home buying and selling process. Whether you're seeking ways to reduce financial burdens or considering strategic financial planning, UFS can provide valuable insights and assistance. Link to UFS:

In challenging economic times, having access to specialized services like those offered by ULS United Life Settlement and UFS United Financial Services can be instrumental in navigating the complexities of insurance and personal finance. These companies aim to empower individuals to make informed decisions that align with their financial goals and needs, ultimately helping them achieve greater financial stability and peace of mind.

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