Be Aware of These Three Medicare Supplement Sales Strategies
- List price – it is not uncommon for insurance companies and their sales people (agents) to use List price as a reason to buy a particular Medicare Supplement. Usually you will receive a list of companies providing the Medicare Supplement coverage plan you are interested in, some familiar companies and some not so familiar. At this point you will be told that all companies must provide the same coverage, and that there is no difference between carriers except for price. Technically, this is a true statement. However, when we look under the surface, the real concern is how an individual company decides on a price higher or lower, if all coverage is the same? What it will cost them to provide a person coverage doesn’t change based on the amount of premium. So why the difference in price. The history of a carrier in your state may reveal a lot about this decision, and definitely reveals where future prices may trend. The only problem is Insurance companies and many agents will not provide this information because it doesn’t fit their best interest, but shouldn’t it be what is in your best interest?
- Standard & Poor & A.M. Best rating – this often used criteria for selecting a Medicare Supplement provider couldn’t be more misleading if it was intentionally so. CMS (Centers for Medicare and Medicaid Services) provides consumer protection for any person whose Medicare Supplement provider were to become insolvent or decide to stop doing business in a particular State. If this were to happen, an individual would simply choose another provider of choice without underwriting. It is a Guaranteed Issue and can not be denied. So what does a company’s financial rating matter? It really doesn’t, and I believe there are at least ten criteria that are significantly more important. Could a person use this rating as a tiebreaker, because all other criteria between two companies were the same? Okay. This is information better served for investing in a company’s stock, and while choosing a Medicare Supplement provider deserves the attention you would give before buying a stock, and we believe looking at proper analytics to be important, this is not a criteria to really consider. 5 Key Benchmarks for choosing a Medicare Supplement.
- Big Name Company – is used as a security blanket that doesn’t really provide the security it suggests. The thought process is, a big company with a household name will be better suited for market fluctuations and unforeseen circumstances than a smaller regional or widely unknown company. This couldn’t be further from reality. An insurance provider’s ability to withstand market, economic, and political changes will be determined by its business and distribution model, not because of a well known name. There are great Medicare Supplement providers large and small, and you should do your due diligence when deciding on the best provider for you.
When choosing a Medicare Supplement, keep in mind whose interest is being protected when speaking with others. Companies must do what is in their stockholders best interest, and while most agents are well intentioned, I believe a lot have not given enough thought to the situation. Working with all information available is how you will make the decision best for you. The agent’s job should be to provide the information and help discuss its relevance, not steer you to a company of their choosing.