Med supp replacement question

[Frank Stastny]

I have always had the effective date on the 1st or 15th. I estimate around 3-weeks to get it approved. If it runs over I just change the effective date to the next 1st or 15th.

Once the policy is issued, I meet again with the client and we call the old insurance company on my cell phone (with speaker on). I tell them I am an insurance agent in Indiana and I am her with Joe Smith who has just bought a new med sup from another company. We need to cancel the old one as of XX/15/2008 (usually at least 5-days in the future.) They verify with the client and confirm the cancelation.

They do refund half months in my experience. Sometimes they request a written cancelation which I always have with me and just get the client to sign and mail it in for them. If they seem uncooperative (Bankers Life) I mail it certified.

I agree, Bankers Life is a pain in the ass to try to deal with.

That is an excellent way of handling it. I use to do that and should probable start again. The only thing is that I haven't delivered a policy in at least ten years. The way I'm doing it seems to work well for my client so that is probably why I haven't gone back to it.

The vast majority of my clients, right now I can't think of one, have the effective date of their policy set on the first of the month. It is usually setup that way because their Medicare starts the first day of the month they turn 65. If I were to set an effective date as the fifteenth of the month they could be without insurance for fifteen days if you don't factor in the grace period.

Although, I have had some who said they were going to cancel their policy at the end of one month and not have the new policy go into effect until the first of the month two months later. In Missouri they have a thirty day grace period. It is not something that I recommend that they do and usually advise them against it but sometimes the really cheap ones do it anyway. This would also work having the new policy go into effect on the fifteenth of the following month instead of the first of the month.

I have had Med Supps refuse to refund the balance when a client has made an annual payment. I know they would never refund part of a month. What companies will refund a partial month? And, why would you even mess with it?

 

[Winter_123]

Thanks all for the excellent responses here.

Winter

 

[GreenSky]

Thanks all for the excellent responses here.

Winter

What about MY response?

Rick

 

[Frank Stastny]

There are protections for the senior making it illegal for an agent to sell dupicate plans.

Rick

That implies that it is illegal to sell two Plan D's. (Duplicate, the correct spelling.)

It is illegal for an agent to sell a prospect any Med Supp, not just a duplicate Med Supp, to a prospect who has stated that they have no intention of canceling the policy they currently have. It doesn't matter if it is a "dupicate" plan or not.

I thought I trained you better than that. You may have to go through a "refresher course".

 

[GreenSky]

That implies that it is illegal to sell two Plan D's. (Duplicate, the correct spelling.)

It is illegal for an agent to sell a prospect any Med Supp, not just a duplicate Med Supp, to a prospect who has stated that they have no intention of canceling the policy they currently have. It doesn't matter if it is a "dupicate" plan or not.

I thought I trained you better than that. You may have to go through a "refresher course".

Sorry Frank. Yes, I spelt it wrong!

You told me I could sell a Plan F and a Plan D. Now you change your mind? Now what do I tell my mother about the Plan J I'm also selling her?

Rick

 

[sman]

The following is the only reference I made to you in my post. "Med Supp companies will not refund any part of a month. As Sman stated, you control that by setting the effective date of the new policy. If I were to write a policy today on the 2nd, I would most likely make it effective December 1. That has nothing to do with contacting the carrier. Where do you think that I said that you said that they HAD to contact the carrier?

I was agreeing with your statement. Having a bad day today? It happens to me too.

I have had it happen numerous times where the policy didn't get canceled on the date requested and an additional month was drafted. For example, if I write a policy on say the 28th of the month and the client insists it go into effect on the 1st of the next month the bank draft may not get canceled by the carrier.

It never has been a hassle to get the company to issue the refund to the client if they initially called in a timely fashion, just takes a long time.

The fact that you haven't had that happen is great. I might be the only agent in the free world that has experienced that.

Maybe I have had it happen simply because I have been doing this for 15 years. When it does happen my new client calls me and initially expects me to take care of it and doesn't understand why I can't handle it for them.

I try to make things as simple and uncomplicated as possible for both my client and me.

Frank,

Look at your original reply and check just under where you replied under my quote. It looks like this:

Quote:
Originally Posted by sman
Winter,

When replacing a Med Supp your client still has to contact the carrier. Dave mentioned requiring something in writing from the client to the carrier to facilitate this. It's been my experience, once the new plan is approved, you can have the client contact the old carrier and request that they stop the bank draft due to them replacing their coverage. Non payment of premium will be sufficient.

As for the coverage becoming effective while the old coverage is still in place, simply request an effective date on the new coverage to begin as the other ends. For example, someone has just paid their October premium for their existing Med Supp and you are going to replace that plan with a new one, request an effective date of 11/01/08 with the new plan.

You responded with:

"When replacing a Med Supp there is nothing that says your new client has to contact the other carrier. However, you must send in a replacement form along with the app to the new carrier."

What else is a person to think? Your statement is just under my previous reply. It appeared to me that you responding directly to what I said.

And no, I didn't have a bad day. But thanks for your concern.

While I haven't been consistently writing Med Supps for 15 years like you have, I have been in the business for a little over 19 years and writing Med Supps for several. And as I said, I don't believe I've ever had someone not have their bank draft stopped when they called the carrier to request it.

 

[Newby]

What companies will refund a partial month?

I know United Teachers does. I'm not certain on the other ones.

I probably should got to a first of the month system but if I meet with someone on the 20th or later, I know they may not be approved by the 1st and if they are it will be too late to cancel the draft. So I just use the 15th.

 

[Winter_123]

What about MY response?

Rick

Oh. You are included. Your response was excellent for you.

 

[Frank Stastny]

Frank,

Look at your original reply and check just under where you replied under my quote. It looks like this:

Quote:
Originally Posted by sman
Winter,

When replacing a Med Supp your client still has to contact the carrier. Dave mentioned requiring something in writing from the client to the carrier to facilitate this. It's been my experience, once the new plan is approved, you can have the client contact the old carrier and request that they stop the bank draft due to them replacing their coverage. Non payment of premium will be sufficient.

As for the coverage becoming effective while the old coverage is still in place, simply request an effective date on the new coverage to begin as the other ends. For example, someone has just paid their October premium for their existing Med Supp and you are going to replace that plan with a new one, request an effective date of 11/01/08 with the new plan.

You responded with:

"When replacing a Med Supp there is nothing that says your new client has to contact the other carrier. However, you must send in a replacement form along with the app to the new carrier."

What else is a person to think? Your statement is just under my previous reply. It appeared to me that you responding directly to what I said.

And no, I didn't have a bad day. But thanks for your concern.

While I haven't been consistently writing Med Supps for 15 years like you have, I have been in the business for a little over 19 years and writing Med Supps for several. And as I said, I don't believe I've ever had someone not have their bank draft stopped when they called the carrier to request it.

Hey Guy,

I have no argument with you and sure as hell have no desire to get into a pissing contest. Actually I really didn't even know what you were talking about. I surely wasn't trying to bust your ass. I just typed what I thought was an innocent response.

You said the client has to contact the carrier and I said the client doesn't have to. Had we said, one way of canceling a policy is to contact the carrier, another way is just to stop paying premiums, this probably would have never come up.

There are two companies that more than just a couple of times have not stopped the bank draft on the day my new client requested and they had to request a refund. Maybe I'm just lucky that way, but I have had it happen more than just a few times.

 

[jdeasy]

Thank you for starting this thread!!

Yesterday, I enrolled a husband and wife in replacement med sups. For some reason I had it in my head that a med sup company would refund a partial month. I made their effective date to coincide with the expiration. When I got in last night, I read this thread and realized that I might have put some of money in jeopardy. I called the clients this morning and told them what I had done and suggested that we change to effective date to Nov. 1 to avoid any problems. They agreed. I called the company, and Frank is exactly right, they were very accomodating about the whole issue and said they would make any change neccesary.

I wasn't worried about the underwriting since this was Admiral and they have you do a point of sale interview and tell you at the end of the call if the clients are approved. Still, in the even of a glitch, it was better to make the change.

No MA company would be that accomodating. Again, thanks for the education!!