A hospital indemnity policy makes so much sense for so many of your clients, especially those in Medicare Advantage plans.
Our ASG Podcast host, Sarah J. Rueppel, sat down with hospital indemnity experts, Damon Logan and Harry Rittner, to explore what these plans do, how they work, how to sell them with a certain mindset, and more.
Read the highlights of their conversation below to discover why adding hospital indemnity to your portfolio is a smart move for not only you, but also, your clients.
To hear the full interview and even more about hospital indemnity, listen to the full episode:
Before we get into the weeds, let’s get the high level on hospital indemnity plans. Can you give us a definition and tell us more about hospital indemnity?
Yeah, so from a high level, hospital indemnity is a policy that you purchase that indemnifies the party from those expenses incurred [during] a hospitalization.
OK, how do these plans typically work, and why would someone need one?
These plans work usually on a case-by-case basis, depending on the type of hospitalization you have and when those hospitalizations occur. It’s going to pay out a defined amount to the beneficiary.
[With a] Medicare Advantage Plan particularly, there’s always going to be a gap … [A] hospital gap is definitely a dangerous place to be for a lot of people on fixed incomes. The hospital indemnity plan should be designed by the agent … to fit that particular [Medicare Advantage] plan and meet those needs.
Is hospital indemnity only for Medicare beneficiaries or can those of us that are under the age of 65 also purchase these plans?
While we concentrate here, at Ritter, on the senior market, these plans are great for the under 65 in the ACA or in the group setting. Plans that you’ll find in the open market kind of mirror those Medicare Advantage plans. So, there are copays [and] deductibles, and these hospital indemnity plans are absolutely perfect to fill those gaps.
When can agents compliantly market hospital indemnity and sell it?
The short answer is any time of the year in terms of an enrollment period.
What about some of the other tools we have here at Ritter to help with selling hospital indemnity plans?
We have quick tools that will actually show you step by step how much it will cost and how [much] those gaps get filled with these hospital indemnity plans. We have other tools like a fact finder where you’re actually going to do some of that upfront discovery of understanding their health a little bit better.
And you’re going to know that going into that sale for an MA [plan]. So, you don’t have to spend a whole lot of time or transition away from the actual sale, and [it will] just make the presentation a little bit smoother.
I think we have the right approach now, especially for all of our agents to be able to pair that hospital indemnity with an MA and pair that hospital indemnity with an ACA plan or a group plan and be able to talk about it much more effectively than we have in the past.
What’s a better way to go about kind of taking this philosophy and strategy and implementing it into our sales process?
The easiest way is adopting a mentality that my client will have to opt out of the product rather than opt in. As an example, when McDonald’s started, you would buy your meals à la carte. You know, I want a hamburger, I want a drink, I want french fries. Now, you have a number one, a number two, and a number three. So, to get just a hamburger, you have to specify that, right? It’s an opt out.
I would want the client to know [MA and hospital indemnity] are two separate deals, but that they work seamlessly together. [Hospital indemnity’s] an option. I would rather them know the option, know that I have conviction as an agent about the product.
Again, it’s fully compliant. As long as they understand that it is a separate company, it is a separate plan that rides along whatever MA [plan] they have, you’re good. And as long as they’ve signed the Scope of Appointment that you can talk about it, then it’s fine. In general, the agents that have an opt-out mentality will mention it. The agents that have an opt-in mentality will plan on reaching back out to their clients at a later date, but they rarely do.
The carriers that are offering these plans — it’s almost like an arms race. So, there [are] a lot of guaranteed issue periods that are now available. One of the big objections that agents always had was, “Hey, I’m selling a Medicare Advantage plan… I’m going to opt into this. Well, I’m not going to opt in right now because I don’t want to lose the sale. I don’t want to have to talk about medical issues. I don’t want to have to go through questions and underwriting. I’m going to wait for that for another time.” And then it never happens. Well, now these carriers have taken a lot of that objection away by offering guaranteed issue periods.
What about the benefits for agents who are selling hospital indemnity?
Number one would probably be commissions. Number two, in my mind, really comes down to persistence, having more stickiness, having more policies in that household. [Clients are] more apt to stay with you as an advisor, not just look at you as an insurance agent but more as an advisor. Gives [an agent] the opportunity to receive more referrals.
Just remember that as [a] professional, part of that obligation is to make sure that you’re looking out for all the best interests of your client.
To learn more about hospital indemnity and selling with an “opt-out” mindset, listen to our full podcast episode. Additionally, register with Ritter for free to gain access to our first-class sales support, resources, and technology! Our More than Medicare team would be happy to assist you in expanding your portfolio beyond health.
Editor’s Note: This article is based on an episode from our ASG Podcast. We have modified content from the original recording. To listen to the full episode, visit RitterIM.com/podcast.
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