My Medicare Advantage Experience Thus Far...

[springbokhouston]

Just read this in the news. Might make some switch to Advantage plans over Suppliments. Thoughts?

CMS Officially Adds Non-Skilled In-Home Care as Medicare Advantage Benefit

This trend looks like it's going to continue for at least the next few years. Coupled with relaxed standards (48 hour scope no longer in play), the new OEP and overall growth of the market there's going to be plenty for everyone.

AARP announced yesterday that they are going to be paying lifetime renewals on Med Supps (In limited markets). I also just got an email this morning that Aetna is upping their comps on Plan N so that agents earn as much as what they would selling a Plan G. All of this has to be in response to the strong growth of MAPD in relation to Med Supps.

 

[springbokhouston]

Cats seem to be jumping out of bags everywhere![/QUOTE]

I hate cats

 

[NSRH]

Hes my opinion...

Most agents, especially when they first start, are broke. If you run an agency, teach them to make a sustainable living on one product, before you think about expanding their knowledge base.

Most agents stay broke, because they are always chasing the next best thing.

I am not a proponent of expanding into Medicare, because it will take away from Final Expense sales, however, It can be done. If agents work with carriers that pay decent renewals on life business, it will take on the same stable effect as MA business.

 

[springbokhouston]

If agents work with carriers that pay decent renewals on life business, it will take on the same stable effect as MA business.

You will have a stabilized base income, but due to much lower persistency of Final Expense, it will max out at a much lower level. One of our guys has been doing FE for 33 years and earns a little over 5k in FE overrides monthly. The math is simple, if you are losing 20% of your business each year it's a matter of time before your income plateaus.

That said, I would certainly not encourage anyone to add another line of business if they haven't figured out the other one first. Ultimately getting more than one shot in a house can only be a beneficial thing if done correctly.

 

[springbokhouston]

Here's an example for you.

Graph in Blue

An agent that's on a 100 point contract with 5% renewals for 5 years, buys 20 leads per week, closes 20% of those at an average premium of $650 and has a year over year persistency of 80%

Graph in Orange

Same agent but manages to add 100 MAPD policies per year with a persistency of 90%, lower than the industry average. This is all based on first year and renewal of $225/year. In other words not a single $450 new to Medicare beneficiary in 5 years.

Renewal Income after 5 years

Final Expense - $13,520/year
Medicare Advantage - $72,425/year
Combined - $85,945

That is selling an additional 2 policies per week for a person running 20 leads, hardly a full time job. Either way, take your pick, FE is a great income by itself and I certainly don't think that adding Medicare is for everyone.

 

[NSRH]

You will have a stabilized base income, but due to much lower persistency of Final Expense, it will max out at a much lower level. One of our guys has been doing FE for 33 years and earns a little over 5k in FE overrides monthly. The math is simple, if you are losing 20% of your business each year it's a matter of time before your income plateaus.

That said, I would certainly not encourage anyone to add another line of business if they haven't figured out the other one first. Ultimately getting more than one shot in a house can only be a beneficial thing if done correctly.

After three years, the persistency stays pretty steady. And 20% drop off year after year is some of the worse in the industry.

But for fun lets say you place 150k in a year (I dont know how a full time agent doesnt do this), at a 70% two year persistency with a modest 8% renewal, you made an additional $8,400 on top of first year income. Year three persistency comes in at 50% so now youve made $6,000 plus an additional $8,400, so now, at the beginning of year three your making roughly $15,000 a year in just renewals.

If an agent places 150k in a year, with an average cost of $200 per sale for marketing, at a 110% commission and a 700 average AV, this agent would have made roughly 100k in a year (excluding gas and wear and tear on car).

The numbers make sense, the bigger issue is if agents can put up the numbers. And if a full time agent cant hit these numbers, Medicare Advantages arent going to fix their issues.

 

[NSRH]

Here's an example for you.

Graph in Blue

An agent that's on a 100 point contract with 5% renewals for 5 years, buys 20 leads per week, closes 20% of those at an average premium of $650 and has a year over year persistency of 80%

Graph in Orange

Same agent but manages to add 100 MAPD policies per year with a persistency of 90%, lower than the industry average. This is all based on first year and renewal of $225/year. In other words not a single $450 new to Medicare beneficiary in 5 years.

Renewal Income after 5 years

Final Expense - $13,520/year
Medicare Advantage - $72,425/year
Combined - $85,945

That is selling an additional 2 policies per week for a person running 20 leads, hardly a full time job. Either way, take your pick, FE is a great income by itself and I certainly don't think that adding Medicare is for everyone.


View attachment 4319

I didnt investigate the numbers on this graph, becuase I already spent my free time giving you the above example. But my only question is this:

If Medicare is so much more lucrative than Final Expense, by not just market that and cross sell FE?

 

[rousemark]

I love threads like these honestly. It really shows how quickly most people resort to low blows, back handed compliments, relationship history....THE POSTING will not stop. It's a response to the previous insult + here's why you are bad.

Even the ones that don't seem to do that actually do. I think i should create some personality profiles for all the IMO leaders on here. Would you all take it? It would give some great insight into why you all are so similar.

I am broken hearted. Even those I tend to admire have warts beneath their makeup.

 

[springbokhouston]

I didnt investigate the numbers on this graph, becuase I already spent my free time giving you the above example. But my only question is this:

If Medicare is so much more lucrative than Final Expense, by not just market that and cross sell FE?

Because Medicare will not pay the bills in the first few years. The combo approach is deadly because you can make money today and build a long stream of residual income as you go using the exact same lead.

 

[myinsurebiz]

Here's an example for you.

Graph in Blue

An agent that's on a 100 point contract with 5% renewals for 5 years, buys 20 leads per week, closes 20% of those at an average premium of $650 and has a year over year persistency of 80%

Graph in Orange

Same agent but manages to add 100 MAPD policies per year with a persistency of 90%, lower than the industry average. This is all based on first year and renewal of $225/year. In other words not a single $450 new to Medicare beneficiary in 5 years.

Renewal Income after 5 years

Final Expense - $13,520/year
Medicare Advantage - $72,425/year
Combined - $85,945

That is selling an additional 2 policies per week for a person running 20 leads, hardly a full time job. Either way, take your pick, FE is a great income by itself and I certainly don't think that adding Medicare is for everyone.


View attachment 4319

I know plenty of peeps doing Medicare and not one of them is at those 3 to 5 year projections and they write 125 MA's a year . . .