My Medicare Advantage Experience Thus Far...

[Todd King]

So youre teaching agents to write less FE and supplement it with Medicare? Because thats whats going to happen.

To keep their FE sales the same, they'd have to put in more time.

If my opinion, if their going to put in more time, it would be better to put more time in FE.

Im just saying it cant be done, Im just saying that its not the best business model in my opinion.

I think you may be looking at it through skewed eyes. Look at it from the point of an independent agent who has nothing to do with a call center.

Yes, you'll make less money with Medicare products the 1st couple of years if you compare it to FE only sales. But you must cross-sell FE with the Medicare products and you'll do just fine. Then, after your Medicare renewals start coming in (which will be more than your FE residuals by far), you'll start to see that you'll make more money in the long run with Medicare. The math is not complicated at all.

 

[rousemark]

The reason is because the persistency on Medicare products is worse than FE business. Clients change year after year. An FE agent will soon because an MA agent for most of the year.

Cross selling like this is very difficult, it can be done, but very few can make it work since MA plans require a huge amount of our attendtion during OEP and AEP.

One reason for the worse persistence is the average age in Medicare js higher than FE so you loose more Med Sup clients due to death.

 

[springbokhouston]

I prefer to go with actual numbers here. On average 10 percent of enrollees voluntarily switch their plans each year. If your numbers are worse than that you probably aren't doing something right.

 

[springbokhouston]

One reason for the worse persistence is the average age in Medicare js higher than FE so you loose more Med Sup clients due to death.

Not true either. There are many people on Medicare due to disability that are way younger than 65. Look at the graph above and you will notice that less than 4% die across all years.

 

[NSRH]

I prefer to go with actual numbers here. On average 10 percent of enrollees voluntarily switch their plans each year. If your numbers are worse than that you probably aren't doing something right.


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Voluntary or not, over 20% are switching year after year. Thats every single year, until they pass away.

Final expense persistency is not even close to be that bad.

Again, Im just sharing a different perspective, we can respectfully disagree.

But I know the numbers

 

[Todd King]

One reason for the worse persistence is the average age in Medicare js higher than FE so you loose more Med Sup clients due to death.

Well, saying that Medicare products have a worse persistency than FE is ludicrous. Medicare Advantage MAY be a little less than FE, but Med Supps certainly aren't...not even close. But the two of them together still have a better than 75% 13th-month persistency.

 

[NSRH]

Well, saying that Medicare products have a worse persistency than FE is ludicrous. Medicare Advantage MAY be a little less than FE, but Med Supps certainly aren't...not even close. But the two of them together still have a better than 75% 13th-month persistency.

MA persistency is awful! Clients switch every year, and thats perfectly normal.

 

[rousemark]

All the emphasis has been on renewals.. The only thing that makes medicare more lucrative is the premium size per case. If the premium amounts are equal, there is no doubt FE is better. On the average a $1000 annual premium will pay $1200 over a 6 year period. That same $1000 will pay $1200 year one on the FE @ 120%. Same amount of money but you don't have to wait 6 years to get it. Doesn't matter if the policy lapses after a year. Put the extra money in the bank, draw a little interest and pay it out to yourself over the 6 year period. Plus, you are ahead by whatever renewals the life plan pays.

 

[rousemark]

Well, saying that Medicare products have a worse persistency than FE is ludicrous. Medicare Advantage MAY be a little less than FE, but Med Supps certainly aren't...not even close. But the two of them together still have a better than 75% 13th-month persistency.

Yeah, but we are talking about 60 month persistency, not 13.

 

[Todd King]

All the emphasis has been on renewals.. The only thing that makes medicare more lucrative is the premium size per case. If the premium amounts are equal, there is no doubt FE is better. On the average a $1000 annual premium will pay $1200 over a 6 year period. That same $1000 will pay $1200 year one on the FE @ 120%. Same amount of money but you don't have to wait 6 years to get it. Doesn't matter if the policy lapses after a year. Put the extra money in the bank, draw a little interest and pay it out to yourself over the 6 year period. Plus, you are ahead by whatever renewals the life plan pays.

But those numbers aren't very realistic are they? The average FE policy is still at $50 per month or $600 per year. The average Med Supp premium is more than $1000 per year. Probably upwards to $1300+.