E & O Insurance

April Wino · 10-22-2009, 06:26 AM

Do I need E & O insurance if I'm only selling med supps?

MedicarePlanSolutions · 10-22-2009, 07:55 AM

It's up to the carrier but most will want it. For the ~$500/year it'll cost you it's a good investment, especially if you end up wanting to sell other lines.

Frank Stastny · 10-22-2009, 05:13 PM

I am not aware of any company offering Med Supps that require an agent to have E&O insurance. That includes the companies I currently represent as well as all of the ones I have represented in the past sixteen years.

E&O is errors and omissions. It is very difficult to make an error or an omission when selling a Med Supp Plan. They are standardized and cannot have benefits deleted from or added to them. They are either issued or denied. No riders, no amendments, the prospect either qualifies or doesn't.

If every insurance company I have ever represented doesn't require the agent to have E&O to sell Med Supps then I do not consider it a high priority either. However, if you are also going to sell FE, most companies offering that coverage will require you to have E&O.

AgentStone · 10-22-2009, 05:22 PM

Originally Posted by April Wino

Do I need E & O insurance if I'm only selling med supps?

Seems that most agents will offer more than one product over time such as final expense life insurance and you don't want to be caught with your pants down...

Better safe than sorry ~ I'd vote on getting E&O!

kwimberl · 10-22-2009, 05:36 PM

Originally Posted by Frank Stastny

I am not aware of any company offering Med Supps that require an agent to have E&O insurance. That includes the companies I currently represent as well as all of the ones I have represented in the past sixteen years.

E&O is errors and omissions. It is very difficult to make an error or an omission when selling a Med Supp Plan. They are standardized and cannot have benefits deleted from or added to them. They are either issued or denied. No riders, no amendments, the prospect either qualifies or doesn't.

If every insurance company I have ever represented doesn't require the agent to have E&O to sell Med Supps then I do not consider it a high priority either. However, if you are also going to sell FE, most companies offering that coverage will require you to have E&O.

Hmmm... United Health Care / Secure Horizons / AARP comes to mind right away.

MoO requires it if you are contracting for any other products in their line.

I cannot imagine giving advice to someone to NOT have E&O...

Frank Stastny · 10-22-2009, 06:31 PM

Originally Posted by kwimberl

Hmmm... United Health Care / Secure Horizons / AARP comes to mind right away.

MoO requires it if you are contracting for any other products in their line.

I cannot imagine giving advice to someone to NOT have E&O...

The question was dealing with sales of Med Supps only and the companies that offer them. I probably should have also said, not including companies that may have a Med Supp but also offer MA plans. If I were selling MA plans, specifically PFFS plans, I would want several million in E&O.

Yes, MOO does require it for other products but NOT FOR MED SUPPS. Again, the question was addressing the sale of Med Supps only! My answer was only directed to Med Supps.

I did not say not to take it or that it has no value. I said, "If every insurance company I have ever represented doesn't require the agent to have E&O to sell Med Supps then I do not consider it a high priority either." Specifically addressing Med Supps ONLY.

I tried to give a factual answer to the question so that April could make a well informed decision for herself.

Another poster said, "It's up to the carrier but most will want it." In sixteen years I have not found that to be true. I felt that it was important that she be aware of that.

GreenSky · 10-22-2009, 06:50 PM

E&O costs under $500 a year for L&H. As far as I'm concerned, the only mandatory expense an agent has is to spend the $40 a month for E&O. If you can't make that commitment, perhaps being self employed isn't the right career.

Rick

Frank Stastny · 10-22-2009, 07:09 PM

Originally Posted by GreenSky

E&O costs under $500 a year for L&H. As far as I'm concerned, the only mandatory expense an agent has is to spend the $40 a month for E&O. If you can't make that commitment, perhaps being self employed isn't the right career.

Rick

That also is a point well taken. However, it does not address the original question. She wasn't asking about the cost or even implying that she couldn't afford it or didn't want to have to take it.

She only asked if she NEEDED IT. Not if it was a good idea to have it or even if it is recommended. Needed it, as in is it required.

Why does everyone want to read more into her question than what she specifically asked?

Had she asked if it was a good idea to have it I would have yes, it is always a good thing to have. But, that was not her question.

GreenSky · 10-22-2009, 07:46 PM

Come on Frank. When did we start reading the actual questions before answering?

However, I find the question about "can I contract without e&o" to be similar to "can I pull the trigger and pretend to shoot my wife without being sure the chamber is empty." You can, but it's not even a question that should be asked.

(To answer the 2nd question above, it really depends on a number of circumstances).

Rick

April Wino · 10-22-2009, 08:26 PM

Where can I obtain e and o for under $500...I was just quoted $650...thanks!

Frank Stastny · 10-22-2009, 08:37 PM

Originally Posted by GreenSky

Come on Frank. When did we start reading the actual questions before answering?

However, I find the question about "can I contract without e&o" to be similar to "can I pull the trigger and pretend to shoot my wife without being sure the chamber is empty." You can, but it's not even a question that should be asked.

(To answer the 2nd question above, it really depends on a number of circumstances).

Rick

Where did you read that she said, "can I contract without e&o"?

This is her original and only question, "Do I need E & O insurance if I'm only selling med supps?". The operative word there is NEED.

Let me ask you, does she NEED E&O to sell Med Supps? In other words, is it required. Does she HAVE to have it before she can write an application?

If your answer is still yes then please also provide the documentation where is specifically states that an agent NEEDS E&O in order to sell Med Supps other than with companies that also offer MA plans.

arnguy · 10-22-2009, 09:32 PM

Originally Posted by April Wino

Where can I obtain e and o for under $500...I was just quoted $650...thanks!

An excellent E&O program is offered to agents who are contracted with Assurant. The current annual fee is $527; however, their policy runs from 5/1/2009 to 4/30/2010 so they pro-rate the premium. For a policy starting 11/01/09 the premium is $276. The deductible is $250 for Assurant products and $2,500 for other products. The coverage I am referring to is for $1,000,000 with a $3,000,000 aggregate. A higher limit is available at a higher premium. If you have a Series 6 this plan includes coverage for mutual funds, variable life, and variable annuities without extra premium. The policy is underwritten by CNA.

Some members of this forum have touted "E&O for Less," but IMHO it really is more expensive because the coverage is limited at the $495 annual premium for just life, accident, and health. If you want to cover Fixed and Indexed Annuities the premium is $595 annually. Variable products and mutual funds raise the premium to $695 annually. The Assurant E&O covers all the aforementioned products for just $527 annually; thus, giving an agent with or without a Series 6 complete coverage for much less premium. Disability Income is covered by "E&O for Less" only with a $50 surcharge in annual premium while that coverage is included in the Assurant product without an extra premium. If an agent has a Series 6 and wants to cover variable products and mutual funds with "E&O for Less" the annual premium is $695 (without DI coverage) while Assurant covers the variable and mutual fund products (as well as DI) at no additional premium.

From the above information you can see why it is my opinion that the "E&O for Less" coverage is not the bargain it appears to be at first blush. Why not cover all bases with Assurant E&O for just $32 more annually than the "E&O for Less"? You never know when the opportunity will arise to write DI and/or fixed and indexed annuities.

You will see NAPA E&O coverage mentioned, also. The premiums for agents who are contracted with their company sponsors is very cheap; however, their premium for non-sponsored (direct) agents is expensive. The $1,000,000/$3,000,000 coverage for direct agents is $804.10 annually!

I hope this long-winded explanation helps.

GreenSky · 10-23-2009, 07:48 AM

Originally Posted by Frank Stastny

Where did you read that she said, "can I contract without e&o"?

This is her original and only question, "Do I need E & O insurance if I'm only selling med supps?". The operative word there is NEED.

Let me ask you, does she NEED E&O to sell Med Supps? In other words, is it required. Does she HAVE to have it before she can write an application?

If your answer is still yes then please also provide the documentation where is specifically states that an agent NEEDS E&O in order to sell Med Supps other than with companies that also offer MA plans.

My definition of "NEEDS" and yours is different. She needs e&o because she'd be an idiot to not have it.

Does every insurance company require it? No. Doesn't lessen the need.

Don't you dare question me again or I swear I'll come to Missouri and have your wife kick your ass.

Rick