What are Ancillary Products?
If you sell Medicare then you know that it doesn’t cover everything. Coverage gaps exist, whether your client is in a Medicare Advantage plan or Original Medicare.
The plans that fill those gaps are called ancillary products.
They round out your client’s coverage and can provide you with a readily available secondary income stream. All you need to do is tap into your current book of business.
Because these plans are marketed to existing clients rather than brand-new acquisitions, which can be costly, you can really boost your revenue.
Just how costly is new client acquisition? The most current research suggests that it can cost 25 times as much to acquire a new client than it can to retain an existing client.
By adding ancillary products to an existing client, you can increase your commissions by 30 to 200 percent, or even more, depending on the products you sell.
Think about it this way, the more lines of coverage a client has with one insurance producer, the less likely they will be to jump ship to another agent.
The more ancillary lines you have in place, the easier it will be for you to write your client into the plans they want and keep competitors out.
Be a one-stop shop!
Also, ancillary health plans pair well with Medicare and Medicare Advantage plans. Dental, vision, and hearing insurance and hospital indemnity coverage go so well with Medicare coverage that they’re listed on the Scope of Appointment. You can talk about them right alongside Medicare as long as your client checked off that option on their scope.
And just a quick compliance reminder, ancillary products cannot be discussed at a Medicare Advantage sales appointment unless your client has filled out a scope and checked off the appropriate box for either dental, vision, and hearing or hospital indemnity. They can, however be discussed during a Medicare Supplement sales appointment, where no Scope of Appointment is needed.
The other ancillary products, cancer, heart attack and stroke, critical illness, short-term care, long-term care, and disability insurance do not have a checkbox on SOAs. The best time to sell these products is at follow-up appointments or check-ins outside of primary coverage enrollment periods. Why should your clients be interested in ancillary coverage?
As we mentioned earlier, ancillary coverage fills in gaps and offers coverage solutions where Medicare does not.
The policies are affordable, and help minimize the out-of-pocket exposure your client might face otherwise.
And these are just the main reasons for adding ancillary products to your portfolio. In the next few lessons, we’ll take an in-depth look at each ancillary product, ideal clients, plan pairings, and more!