I've been doing some thinking on my approach to helping seniors with Med Supps. Most of my clients want fairly comprehensive coverage, and most of them see the logic of not buying F & enrolling in Plan G. The only problem with this recommendation is that we do have a Part B deductible risk - it has the potential to skyrocket (even though it went down this year).
For those who want less comprehensive coverage or for those who don't necessarily ask for advice, my goal is to help them get what they want & educate them on the pros and cons of whatever plan they decide on.
Anyway, I've been thinking about a possible different approach to Med Supps. I'd like feedback - is this a foolish idea? Plausible? Is it a great idea? How would you tweak it?
Someone once said on the forum that the point of insurance is to minimize risk and hopefully leverage our money. I think this type of plan has the potential to do it, but at this stage in my career I'm hesitant to recommend something like this without getting input from others.
Here are the facts that have led me to this idea. (Columbus, OH)
1. Current average Plan F for Female 65 is $1770
2. Current average Plan Hi-F for Female 65 is $607
3. Current average Plan F for Female 87 is $2938
4. Current average Plan Hi-F for Female 87 is $1079
Being an independent agent, we can normally do better than "Average." But, it is what it is.
In a few years, I would guess the average Plan F @65 will be closer to $2,000. We are all well-aware of the rate increases on Med Supps. Average at 87 will be closer to $3200.
Thinking long-term, my "best guess" is that a Hi-F will save most of my clients approximately $1,500 in premium per year over the life of their policies.
For my healthy T65 clients who also have life insurance needs/wants, I'm thinking about proposing this as an alternative to my typical "Plan G" + FE recommendation.
Purchase Hi-F - This will guarantee that their OOP will not go above $2,000. My guess is that most will not hit the $2,000 limit for the majority of years that they are on Medicare. Is this consistent with your clients/prospects on Hi-F?
Secondly, place $2,000 into an ON Prestige Max life ins contract ($27,500 Face). The premium is paid for 10 years. Guaranteed CV builds quickly ($3200 @ 68), dividends (not guaranteed) are also in the picture. Between year 7 & 8, the CV grows by $2,000 per year - guaranteed. Every year after that, the CV grow more than their premium payments. The idea is that if they do incur a year with high medical costs, that they can use their CV through a loan.
Most of them will hopefully stay fairly health for another few years, after which their CV will be decent. At age 73, their CV is guaranteed at $12,660.
It seems to me that this is a MUCH better & more efficient approach than selling them a Plan G. It's way better than G + a Final Expense policy.
The benefits, as I see it, are many. And, I think that if I were 65 and healthy, that I might do something like this.
What are your thoughts?
For those who want less comprehensive coverage or for those who don't necessarily ask for advice, my goal is to help them get what they want & educate them on the pros and cons of whatever plan they decide on.
Anyway, I've been thinking about a possible different approach to Med Supps. I'd like feedback - is this a foolish idea? Plausible? Is it a great idea? How would you tweak it?
Someone once said on the forum that the point of insurance is to minimize risk and hopefully leverage our money. I think this type of plan has the potential to do it, but at this stage in my career I'm hesitant to recommend something like this without getting input from others.
Here are the facts that have led me to this idea. (Columbus, OH)
1. Current average Plan F for Female 65 is $1770
2. Current average Plan Hi-F for Female 65 is $607
3. Current average Plan F for Female 87 is $2938
4. Current average Plan Hi-F for Female 87 is $1079
Being an independent agent, we can normally do better than "Average." But, it is what it is.
In a few years, I would guess the average Plan F @65 will be closer to $2,000. We are all well-aware of the rate increases on Med Supps. Average at 87 will be closer to $3200.
Thinking long-term, my "best guess" is that a Hi-F will save most of my clients approximately $1,500 in premium per year over the life of their policies.
For my healthy T65 clients who also have life insurance needs/wants, I'm thinking about proposing this as an alternative to my typical "Plan G" + FE recommendation.
Purchase Hi-F - This will guarantee that their OOP will not go above $2,000. My guess is that most will not hit the $2,000 limit for the majority of years that they are on Medicare. Is this consistent with your clients/prospects on Hi-F?
Secondly, place $2,000 into an ON Prestige Max life ins contract ($27,500 Face). The premium is paid for 10 years. Guaranteed CV builds quickly ($3200 @ 68), dividends (not guaranteed) are also in the picture. Between year 7 & 8, the CV grows by $2,000 per year - guaranteed. Every year after that, the CV grow more than their premium payments. The idea is that if they do incur a year with high medical costs, that they can use their CV through a loan.
Most of them will hopefully stay fairly health for another few years, after which their CV will be decent. At age 73, their CV is guaranteed at $12,660.
It seems to me that this is a MUCH better & more efficient approach than selling them a Plan G. It's way better than G + a Final Expense policy.
The benefits, as I see it, are many. And, I think that if I were 65 and healthy, that I might do something like this.
What are your thoughts?