It doesn’t hurt to ask, and it may hurt not to ask!

In a recent case, a client taking care of his father and his father’s medical and financial affairs, received two separate premium notices from a national health insurer with different amounts. Upon contacting and asking the insurer, the client was advised that a mistake had been made and, unfortunately, the higher premium was the correct amount to be paid. The difference between the two premium amounts invoiced was not much, and the caregiver could have simply saved the time and effort and paid the higher premium and forgotten about the matter. That course of action, however, would not have been appropriate for the caregiver, who has a fiduciary duty under a power of attorney to act in the principal’s best interests. Here, the lower premium amount could have been the correct amount, and simply sending in the higher premium just to avoid some inconvenience may have seemed harmless enough, but it is the principal’s money and not the agent’s money that is being spent. The caregiver did the right thing.

Not scrutinizing a principal’s bills and financial affairs can lead to problems. Caregivers and agents should not summarily pay bills without reading them and perhaps questioning them from time to time. As was seen in this case, which occurred in January 2016, even big insurance companies make a mistake from time to time. Finally, it should be noted that some insurance policies state that paying less than the correct amount of a premium due can constitute a default and lead to a lapse in coverage, which could be devastating for an insured. 