Zero Deductible Health Insurance with Cash Back

[Alston]

I've recycled an old sales idea and am calling it:

"Zero Deductible Health Insurance with Cash Back"

Few things are more frustrating to me as an agent than when I try my hardest to get someone to buy the best plan and they decide to buy an overpriced low deductible policy instead.

Often I'll talk to one spouse and get him or her to see the wisdom of an HSA or some other other high deductible policy.

Unfortunately, the spouse who wasn't part of the conversation is often a better sales person than I am. I'm often told "what you said makes sense but my (husband/wife) thinks..."

They will often buy the more expensive policy and the family winds up giving money to the insurance company that should have stayed in their bank account.

Sure I make a commission, often a higher commission on the more expensive policy, but I feel like I haven't done my job when they buy an overpriced policy.

Who else is similarly frustrated? Any other sales concepts to share?

 

[YouGotMyMoney]

As long as they buy from me, I am not frustrated at all.

 

[CHUMPS FROM OXFORD]

Interesting idea Alston.



Cheap Pennsylvania Health Insurance Plans

 

[djs]

Hmmm, I get frustrated both ways on this. I always try to make sure the person can afford the deductible when they want a high deductible plan. Yes, some facilities will work with you, which I account for, but having a $10K deductible when you live paycheck to paycheck with no savings is almost useless. Of course, you can argue that it is one step better than having a low deductible, but the policy lapses because you can't afford the premiums.

In most situations, I run through the max out of pocket they can run through in a year, including the premium. Then we talk about the risk of a low premium / high deductible plan vs a high premium / low deductible plan. Actually seeing the numbers on paper help steer them to making a reasonable decision.

I stole this idea from one of my clients. We were talking about the advantages of an HSA, and she ran the numbers with me sitting there (she was an accountant). She went with the HSA compared to the plan she wanted to buy for several reasons, but mostly because she knew she would use it, but the most she could spend on the HSA was less than the most she could spend with a higher premium plan. This is not always true, but then most people assume they are not going to use their insurance either.

Dan

 

[Alston]

I can understand it when people buy the more expensive policy if the difference between the premiums is less than the difference in the deductibles and other cost shares.

However, when I run into a situation where the difference between the premium is equal to or greater than the difference between the cost shares, I get a little frustrated when I can't sell the right policy. In these situations, there is no scenario where the more expensive policy is better.

Some people are math challenged. Some people have been conditioned not to believe sales people.

Some people will tell me that they can't budget and even though it works on paper, they would never be able to save the difference in premium and they feel better overpaying for their insurance policy because the "excess" money would be spent on frivolous things otherwise.

How can so many adults have so little discipline that they can't put money into a bank account and not touch it? I guess that is why we are in the mess we are in right now as a country.

I'd pull out my hair if I had enough to grab hold of.

 

[TXINSURANCE]

Who else is similarly frustrated? Any other sales concepts to share?

Depends on your marketing strategy. On Internet leads, your concept is difficult if not impossible to pull off.

Face to face business owner might be a different strategy all together. I agree with identifying your client needs, etc., etc.,

Some people will tell me that they can't budget and even though it works on paper, they would never be able to save the difference in premium and they feel better overpaying for their insurance policy because the "excess" money would be spent on frivolous things otherwise

Interest only home loans sound good on paper as well, but hardly anyone has the discipline to make these loans work in their favor. These loans are pretty well gone now anyhow - just thought it was a good example. Another great example is the 4 to 8% that actually fund their HSA plans. Americans as a whole do not have "excess" money, look at our national savings rate if you want a good laugh.

 

[Alston]

Americans as a whole do not have "excess" money, look at our national savings rate if you want a good laugh.

It has improved since the recession but it is still pretty sad.

My parents were children during the great depression.

They were... hold on, let me get my thesaurus out ... thrifty, frugal, cheap... yeah that's it "cheap."

They were cheap!

Maybe we need a major recession every generation or so to get people to stop spending like idiots.

 

[arnguy]

Geez, Alston, I am still waiting for the zero premium life insurance to get off the ground. With a cash back added to it, it would be a killer. I have my $10 waiting to invest in that program.

 

[somarco]

On Internet leads, your concept is difficult if not impossible to pull off.

I have been doing this successfully for at least 4 years. It isn't difficult at all. Over 90% of my clients end up buying HDHP's.

4 to 8% that actually fund their HSA plans

That is not my concern.

If I show them how to save $300 - $500 per month (family) and they choose not to fund the HSA that is their problem, not mine.

All I do is point out the exposure on the $2500 copay plan vs a $5000 HDHP which are essentially equal. The premium differential becomes a no-brainer.

 

[mtnmusic]

I go a step farther and offer a high deductible policy to lower premium dollars and with the money saved "wrap" a secondary indemnity policy around it to provide some outpatient benefits and help satisfy the deductible on the primary policy.