Med supp premium refunds

[retread]

That's what I meant. Sorry I worded it wrong. You don't get a refund and a discount.

No, I don't think you worded it wrong, I suppose I confused you with the term "apply the discount" when I should have said "remove the discount"....

The question remains... are you saying you think the discount is removed before or after prorating the premium balance?

 

[Joe Moore]

Joe - it must be great to have your sons working with you.

Yes, you are so right. They both do a great job. Thanks for the comment.

Tim, the oldest has been in the business 20 years. Greg, the youngest has been licensed about 14 years but has only been real serious about it for about the last 4-5 years.

I have a third son Jeff, that worked in the business for about 3 years 15-18 years or so ago, but left the industry to start a buy-sell-trade music CD business that is still in operation. It is not near the volume as a few years ago, but still operating profitably because of no debt.

He made enough money in the insurance business from age 19-22 to start this music business. Can you imagine running final expense leads at age 19, making good money and qualifying for a company convention? I thought this was a great accomplishment.

He did this and then decided this was not what he wanted to do; he wanted to be in the music business. What is the old saying? Different strokes for different folks?

Yep! I am proud of all my boys!

 

[moonlightandmargaritas]

In my life I've always known that insurance is pro-rated.

Actually, it depends upon not only what type of insurance, but also the state involved.

As I'm sure you're aware, here in Florida life and health insurance is pro-rated as a refund of unearned premium.

However, if you cancel an auto policy mid-stream, insurers are allowed to short-rate you.

 

[jdeasy]

No, I don't think you worded it wrong, I suppose I confused you with the term "apply the discount" when I should have said "remove the discount"....

The question remains... are you saying you think the discount is removed before or after prorating the premium balance?

What I'm saying is that the company would remove the discount before applying the refund. Say you bought a life policy and it was $100/mo, but, you could pay annually for $1000, so, you paid it annually. Six months in, you decide to cancel. The company would keep what they feel is earned, $100/mo for the six months you had it and send you a refund for $400. You would feel they owe you $500, half of what you paid, but, the companies don't figure it that way and it must be legal here as they all do it like that.

 

[Professor Leads]

It definitely depends on your state. In Delaware the insurance companies are not required to refund unused premium. For this reason I advise my Delaware clients against paying annually. Most carriers do not know the individual state laws on it so they will usually refund--but I have had problems with one particular carrier giving their clients a hard time getting their refund.

 

[Russ]

It definitely depends on your state. In Delaware the insurance companies are not required to refund unused premium. For this reason I advise my Delaware clients against paying annually. Most carriers do not know the individual state laws on it so they will usually refund--but I have had problems with one particular carrier giving their clients a hard time getting their refund.

Against paying annually? I can see why it wouldn't matter if it's a company like Mutual of Omaha, that advances an annual commission on a monthly bank draft, but I'm not sure I would be advising a client to not pay insurance annually when it usually offers a discount + if you're the agent you get the annualized commission + it locks the premium in for the year(no worries of a rate increase for at least 1 year).

I could see telling someone that that was not your client, in hopes of replacing, but if their your client, I can't see doing that.

 

[Professor Leads]

Against paying annually? I can see why it wouldn't matter if it's a company like Mutual of Omaha, that advances an annual commission on a monthly bank draft, but I'm not sure I would be advising a client to not pay insurance annually when it usually offers a discount + if you're the agent you get the annualized commission + it locks the premium in for the year(no worries of a rate increase for at least 1 year).

I could see telling someone that that was not your client, in hopes of replacing, but if their your client, I can't see doing that.

And why do they give a discount? So the insurance company can invest it and earn interest. The discount usually amounts to about 4-5% which the client can usually save by keeping in their own investments.

My carriers have a 1 year rate guarantee anyway.

But, my biggest reason is because of Delaware law which does not protect the consumer should they cancel mid year.

Selling them an annual premium so they are stuck with me is akin to my biggest pet peeve: forcing customers to sign a contract that obligates them to continue using your services even if your services suck wind. I hate that.

Have you ever gone to a restaurant and been told, "Welcome to Sal's Restaurant. We are glad to have you dine with us this evening; but first you have to sign a one year contract stating that you will not eat anywhere else for the next year even if we decide to change our menu".

 

[Russ]

And why do they give a discount? So the insurance company can invest it and earn interest. The discount usually amounts to about 4-5% which the client can usually save by keeping in their own investments.

My carriers have a 1 year rate guarantee anyway.

But, my biggest reason is because of Delaware law which does not protect the consumer should they cancel mid year.

Selling them an annual premium so they are stuck with me is akin to my biggest pet peeve: forcing customers to sign a contract that obligates them to continue using your services even if your services suck wind. I hate that.

Have you ever gone to a restaurant and been told, "Welcome to Sal's Restaurant. We are glad to have you dine with us this evening; but first you have to sign a one year contract stating that you will not eat anywhere else for the next year even if we decide to change our menu".

"services suck wind"?.....are you selling yourself short?

Companies are obligated to do what's in the contract. Restaurants aren't obligated to continue serving the same food....we don't sign a contract.

 

[G.Gordon]

Depends on the state and the ethics of the company.

In Missouri we are a no refund state, but I've never heard of a quality company refuse refund. If I have a potential client thinking about it a call to the outbound company is in order before I even take the application. If I remember right Bankers Life gave me an issue once and United American will screw a client any chance they get. All other carriers have refunded the premiums.