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I have always had the effective date on the 1st or 15th. I estimate around 3-weeks to get it approved. If it runs over I just change the effective date to the next 1st or 15th.
Once the policy is issued, I meet again with the client and we call the old insurance company on my cell phone (with speaker on). I tell them I am an insurance agent in Indiana and I am her with Joe Smith who has just bought a new med sup from another company. We need to cancel the old one as of XX/15/2008 (usually at least 5-days in the future.) They verify with the client and confirm the cancelation.
They do refund half months in my experience. Sometimes they request a written cancelation which I always have with me and just get the client to sign and mail it in for them. If they seem uncooperative (Bankers Life) I mail it certified.
I agree, Bankers Life is a pain in the ass to try to deal with.
That is an excellent way of handling it. I use to do that and should probable start again. The only thing is that I haven't delivered a policy in at least ten years. The way I'm doing it seems to work well for my client so that is probably why I haven't gone back to it.
The vast majority of my clients, right now I can't think of one, have the effective date of their policy set on the first of the month. It is usually setup that way because their Medicare starts the first day of the month they turn 65. If I were to set an effective date as the fifteenth of the month they could be without insurance for fifteen days if you don't factor in the grace period.
Although, I have had some who said they were going to cancel their policy at the end of one month and not have the new policy go into effect until the first of the month two months later. In Missouri they have a thirty day grace period. It is not something that I recommend that they do and usually advise them against it but sometimes the really cheap ones do it anyway. This would also work having the new policy go into effect on the fifteenth of the following month instead of the first of the month.
I have had Med Supps refuse to refund the balance when a client has made an annual payment. I know they would never refund part of a month. What companies will refund a partial month? And, why would you even mess with it?