I am trying to sharpen my understanding a little about how dollars are credited when a client replaces a med supp and cancels the current one.
First, are there safeguards as with MA's to prevent clients from enrolling in more than one med supp (perhaps inadvertently by not cancelling the other one). In my limited sale of supps (so far, hoping to do more) I assume not and emphasize to clients the need to take affirmative action to cancel the previous one when they have confirmed acceptance into the new plan. This is required rather than just a safeguard right? No one is going to notice at the fed or carrier level that they are double enrolled right?
Second, can clients just dis-enroll with most carriers via a phone call or are there some carriers that require paperwork or some other hoops to jump through.
Third, clients are obviously concerned about double paying for a month. Suppose they get their new policy mid-month and are paid up for that month through an automatic withdrawal at the beginning of that month. Should they expect to be have their account credited for the two weeks after they cancelled? (how does that work, they just adjust their account or they close it out and send a paper check?)
Or, is all of this subject to variation from carrier to carrier. In other words, can one carrier credit back and another take the position that if they do not give back partial credits for the monthn once the month has been paid up.
Thanks for any comments/guidance here.
Winter
------------------------------------ The Bolsheviks are dining in the capital.
I am trying to sharpen my understanding a little about how dollars are credited when a client replaces a med supp and cancels the current one.
First, are there safeguards as with MA's to prevent clients from enrolling in more than one med supp (perhaps inadvertently by not cancelling the other one). In my limited sale of supps (so far, hoping to do more) I assume not and emphasize to clients the need to take affirmative action to cancel the previous one when they have confirmed acceptance into the new plan. This is required rather than just a safeguard right? No one is going to notice at the fed or carrier level that they are double enrolled right?
The applications I have seen for supps have several questions about existing supp or MA coverage and require the applicant to state if and when they will terminate the other plan (or have terminated). It should be covered pretty thoroughly in the new application
Originally Posted by Winter
Second, can clients just dis-enroll with most carriers via a phone call or are there some carriers that require paperwork or some other hoops to jump through.
It probably depends on carrier, but most I have worked with would require a written signed request from the subscriber indicating desire to drop the plan and effective date of the drop.
Originally Posted by Winter
Third, clients are obviously concerned about double paying for a month. Suppose they get their new policy mid-month and are paid up for that month through an automatic withdrawal at the beginning of that month. Should they expect to be have their account credited for the two weeks after they cancelled? (how does that work, they just adjust their account or they close it out and send a paper check?)
Or, is all of this subject to variation from carrier to carrier. In other words, can one carrier credit back and another take the position that if they do not give back partial credits for the monthn once the month has been paid up.
I would assume like most health contracts, it would be month-to-month and no partial refunds for partial months.
I am trying to sharpen my understanding a little about how dollars are credited when a client replaces a med supp and cancels the current one.
First, are there safeguards as with MA's to prevent clients from enrolling in more than one med supp (perhaps inadvertently by not cancelling the other one). In my limited sale of supps (so far, hoping to do more) I assume not and emphasize to clients the need to take affirmative action to cancel the previous one when they have confirmed acceptance into the new plan. This is required rather than just a safeguard right? No one is going to notice at the fed or carrier level that they are double enrolled right?
Second, can clients just dis-enroll with most carriers via a phone call or are there some carriers that require paperwork or some other hoops to jump through.
Third, clients are obviously concerned about double paying for a month. Suppose they get their new policy mid-month and are paid up for that month through an automatic withdrawal at the beginning of that month. Should they expect to be have their account credited for the two weeks after they cancelled? (how does that work, they just adjust their account or they close it out and send a paper check?)
Or, is all of this subject to variation from carrier to carrier. In other words, can one carrier credit back and another take the position that if they do not give back partial credits for the monthn once the month has been paid up.
Thanks for any comments/guidance here.
Winter
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.
First, are there safeguards as with MA's to prevent clients from enrolling in more than one med supp (perhaps inadvertently by not cancelling the other one).
No there isn't.
Originally Posted by Winter
In my limited sale of supps (so far, hoping to do more) I assume not and emphasize to clients the need to take affirmative action to cancel the previous one when they have confirmed acceptance into the new plan.
That is correct. It is the new clients responsibility to cancel the policy.
Originally Posted by Winter
This is required rather than just a safeguard right? No one is going to notice at the fed or carrier level that they are double enrolled right?
Also correct. It is illegal for a senior to have more than one Med Supp policy. However, it is legal for a senior to keep their company group insurance and take a Med Supp policy. It is highly unlikely that anyone will check with the client and ask them how many Med Supps they have unless the client tells the dept of insurance.
Originally Posted by Winter
Second, can clients just dis-enroll with most carriers via a phone call or are there some carriers that require paperwork or some other hoops to jump through.
There are a number of different ways a senior can dis-enroll with the carrier of their Med Supp policy.
They can simply go to their bank and stop the automatic bank draft, they can call the company and request their policy be canceled but they will most likely have to send a letter. The worst way to tell them to cancel is by calling the agent who wrote the policy. I would recommend to them that they not do that for obvious reasons.
I tell my new clients to cancel their bank draft. Calling the company usually results in them drafting an extra month. Then your client has to request a refund that will take six to eight weeks for them to receive.
Originally Posted by Winter
Third, clients are obviously concerned about double paying for a month. Suppose they get their new policy mid-month and are paid up for that month through an automatic withdrawal at the beginning of that month. Should they expect to be have their account credited for the two weeks after they cancelled?
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.
Most Med Supp companies will get the policy to the client in about three weeks. I like to set the effective date far enough in advance so my new client has the policy in their hands before they stop the bank draft on the old one.
If you ever find that either you or your client, for what ever reason, wants the new policy to start later than the effective date you put on the application you can simply call the company and ask that they advance the effective date. At least I can with my carriers.
You can also call, or at least I can, and request that the policy go into effect sooner than the effective date on the app.
With the companies I represent, if the client insists that they want the policy to go into effect on the first of the next month and it is say the 25th of the current month, I could put a November 1 effective date even though the app may not even get to the company until after November 1.
Med Supp companies are pretty easy to deal with.
You can give me a call anytime. I always have time to talk to insurance agents.
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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.
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.
Having my new client go to the bank and stop their auto bank draft is what I tell all my new clients to do. I tell them that their old company will send them bills and letters and to throw them away.
As I said earlier, if your new client calls their current carrier and requests that the bank draft be stopped say December 1 I have had several instances where they told my client they would and then drafted the December payment anyway. I have learned to tell them just to go to the bank. It makes my life and theirs a lot simpler.
If the client says they don't want to pay the fee to stop it I ask them if they would rather pay the $20 or have the company claim that they couldn't process the request quickly enough and December got drafted anyway. That's when I tell them that it will probably take at least eight weeks to get their refund check. They usually go to the bank.
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Last edited by Frank Stastny : 10-02-2008 at 03:36 PM.
Reason: Automerged Doublepost
The bottom line is a med supp is no different than an IFP. There are protections for the senior making it illegal for an agent to sell dupicate plans. (I get around this and double my income by submitting both an original and copy to the company).
Rick
------------------------------------ ILIAA
Training, Community, Support, and Success Independent Life Insurance Agents Assn rick@iliaa.org
The bottom line is a med supp is no different than an IFP. There are protections for the senior making it illegal for an agent to sell dupicate plans. (I get around this and double my income by submitting both an original and copy to the company).
Rick
I KNEW you had an angle
So am I still uninvited to you elitist little SoCal agents group lunch thingy?? I know, a cental coaster might taint the affair LOL
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.
Having my new client go to the bank and stop their auto bank draft is what I tell all my new clients to do. I tell them that their old company will send them bills and letters and to throw them away.
As I said earlier, if your new client calls their current carrier and requests that the bank draft be stopped say December 1 I have had several instances where they told my client they would and then drafted the December payment anyway. I have learned to tell them just to go to the bank. It makes my life and theirs a lot simpler.
If the client says they don't want to pay the fee to stop it I ask them if they would rather pay the $20 or have the company claim that they couldn't process the request quickly enough and December got drafted anyway. That's when I tell them that it will probably take at least eight weeks to get their refund check. They usually go to the bank.
Frank,
I never said they HAD to contact the carrier. I recommend this for the very reason you stated (so they don't have to pay their bank a fee). I always recommend they write down the date, time and name of the person they speak with when they cancel their draft. This way they can hold someone responsible if there were a mistake. I know I'm not the veteran you are, but I can honestly say that I have never had a client (Med Supp, Life Insurance, Mutual Fund systematic investor, etc) who has ever had the carrier or mutual fund company not honor their request in a timely fashion.
I never said they HAD to contact the carrier. I recommend this for the very reason you stated (so they don't have to pay their bank a fee). I always recommend they write down the date, time and name of the person they speak with when they cancel their draft. This way they can hold someone responsible if there were a mistake. I know I'm not the veteran you are, but I can honestly say that I have never had a client (Med Supp, Life Insurance, Mutual Fund systematic investor, etc) who has ever had the carrier or mutual fund company not honor their request in a timely fashion.
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.
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 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?
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".
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?
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.
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.
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.
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!!
Med supp replacement question
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