There's an interesting post on InsureBlog today regarding phantom insurance—that is, a policy that lures people into feeling protected when in fact there are better alternatives.

A lady called looking for health insurance. Her current plan was increasing to over $600 per month. Among her health issues was high cholesterol. Every year her doctor ordered a lipid panel test as part of her physical exam. He also had her on an expensive cholesterol reducing med.

I suggested a carrier that would insure her but would not cover her cholesterol med or her lipid panel.

The premium was $280 less than her renewal.

The med would run $140 per month. The lipid panel around $80, once a year.

She opted to keep what she had and pay the higher premium.

She believes she has coverage but all she really has is phantom insurance. The cost of the phantom insurance is over $2500 per year.

People decide not to change policies for all sorts of reasons. It might be a hassle. Or they might really like their agent. Or, they might have phantom insurance.

Phantom insurance seems like the mother of all sales obstacles. How do you overcome it? Is it a lost cause?

(photo source)