Interesting thought on health insurance plans

Discussion in 'General Insurance Agent Discussions' started by cod8825, Dec 12, 2006.

  1. cod8825
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    cod8825 Expert

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    Here is some thought on adding value to a health plan. I know that this might not even be feasible but curious as to your thoughts.

    In my dealing with life insurance and supplemental products like Critical Illness. A good deal of the companies had products that had a Return Of Premium feature that paid premiums back every 10 years or at the end of the policy.

    I wonder if we could do a feature like this for health plans, how much it would cost and how often we would return premiums.

    I know that in the ten years since leaving my parents group plan I have paid close to ten thousand dollars and probably had around five hundred dollars in medical expenses. I would not dare think of cancelling coverage as I know one big event thats it. Just some thoughts.
     
  2. somarco
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    somarco Guru

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    Supposedly Mega has a ROP feature . . . but I doubt anyone has ever kept the policy long enough to get a refund.

    Someone years ago, cant recall who, offered a health insurance plan with a ROP benefit. I want to say Paul Revere, but that may not be right.

    Adding ROP to a health insurance plan would increase the premiums by 30% or more and require clients to stay with the plan for 10 years or longer.

    I don't know anyone willing to pay that kind of additional money, or keep the same plan for 10+ years.
     
  3. BKrocko
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    World Ins. has come out with a decreasing deductible in CO. If you don't use the ins (except for free wellness visit each year after the first year or state mandated benefits), then your deductible drops 1K after the first year - if you don't use it the 2nd year, then it goes down another $500. It will remain at the decreased rate for the remainder of the year once you use it and then default back to the original amount. $1500 is the max decrease and once used, the option expires.

    It is a good idea, but all it takes is one visit for a minor illness or whatever - then the option goes away. It's one of those added benefits that the customer likes to hear about.
     
  4. somarco
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    The decreasing (or disappearing) deductible has been tried before and never really got much traction.

    The only gimmick that seems to work is the multi-year rate guarantee (such as with Time) and that is only if they are competitive.

    Ran rates last week for a family on the HSA. Time was $440 with a 2 year rate guarantee; GR was $380 for an almost identical plan. That's $60/month, $720 a year more to save $???? in the second year. GR would have to give a 32% rate increase in order for them to just break even.

    BX is the only carrier with big enough balls to give out rate increases like that and they usually average 40%+ per year. Most of my carriers are under 20% and one has been averaging 12% or less.
     
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