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Fly by Night?

Don't fall for a scam--use these tips before you buy health insurance.

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This story appears in the October 2003 issue of Entrepreneur. Subscribe »

When you buy health insurance, you're buying the peace of mind of knowing that medical bills will be paid. But what if the plan is bogus? As crimes go, health insurance swindlers aren't likely to make anyone's most wanted list--unless, of course, you happen to be among their victims. These scammers typically target small businesses and their employees, often collecting millions of dollars in premiums and vanishing when claims start coming in.

With health insurance costs rising, so are opportunities for con artists selling what appear to be affordable health plans. How can you make sure you don't become a victim of a fraudulent plan? Jeanne Salvatore, vice president for consumer affairs with the Insurance Information Institute in New York City, offers these tips:

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