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By "modernized" do you mean just what you described above or something else?
Aetna Continental Life Vs New Aetna Med Supp
- Thread starter wehotex
- Start date
By "modernized" do you mean just what you described above or something else?
Enter sman.......................
Here to save the day. The fact that you thought of me (and him) when the topic of MoO's GI Plan N came up means I'm doing my job.
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Yes it is. Why didn't I think to search on Google?
https://www.google.com/#q=why+do+people+overlook+the+obvious&*
Once I heard someone say that an engineer and building owner/CEO guy were standing in the lobby looking around discussing how they wanted another elevator but didn't really have room for it. A janitor overheard them and asked "Why don't you put it on the outside?" And after the construction was finished we have the world's first elevator on the outside of a building. The first one I was in was at the Peachtree in downtown Atlanta. I don't know if that was the first one or not. Seems like it wasn't. If I wanted to know I guess I could look it up on Google.
Did the article on Modernized Medigap plans answer your question or not?
I have no idea if the Peachtree Westin elevator was the first "outdoor" elevator or not. Nor do I care.
But if you want a virtual ride, here you go.
I have no idea if the Peachtree Westin elevator was the first "outdoor" elevator or not. Nor do I care.
But if you want a virtual ride, here you go.
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First of all, 25% commission is pretty good.
To address your question, the answer is no. Insurance companies want to make a big profit for their shareholders. Individual Medicare Supplements must have a 65% (or higher) claim ratio. The insurance company rates the renewals, in the long term, on the claims, not a mere margin over claims/costs. 65% claims means a 35% margin is possible. In fact, in the early years of a policy, the insurance company loses money -- claims and commissions are close to 90% all by themselves -- add marketing, underwriting, incentive trips, customer service, and claim processing. Well, you get the idea. And factually, virtually all companies underprice the product in the first few years, so as to get new business on the books. The cycle is so predictable. Rate should be X. Rate sold is X-10%. Once a sufficient block of business is in place, time to jack up rates. So, a new underwriting company is rolled out to sell underpriced policies in the same state; the existing block immediately is "right priced" to the max allowed by the 65% claim requirement. The first round of customers (the very price sensitive) drop coverage because their rate just went up $12/month, and almost 100% of those who dropped were in good health. The pool gets worse. Another increase, maybe 10% happens. Then another 10%. Still more people (healthy) drop coverage with that company. Don't forget, age increases are still there, too. Six years after issue, rates have easily doubled, tripled after 10 years. I ran into a guy one day that had a $10,000/year premium (no, I'm not kidding) on a 20 year old policy; he had cancer, nobody else wanted him.
Remember, renewal commissions are based on originally sold premium. The $100/month policy paying $25 commission is still paying $25 when the premium is $150, by the time six years pass, the commission drops to $6/month, and the premium is now $200.
premium claims comm.
Year 1 $100 - $ 65 - $25 = $13/month left for overhead/taxes/profit
Year 7 $200 - $130 - $ 6 = $54/month left for overhead/taxes/profit
Year 10 $300 - $195 - $ 6 = $99/month left for overhead/taxes/profit
See, the company is in business to make maximum profits, not a "fair" profit on each policy. The insurance company makes more money from sick people than from healthy ones; it's just that they can't sell at the cheap rate to sick people, because it would blow up their scheme (the early claim ratio has to fit a $100 premium while the company is trying to get a sizable block built up).
If you don't believe this is how it really works in the back room, look up "Mutual of Omaha" in the dictionary.
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That makes no sense.
Where did you get that one?
If it were true carriers would only want sick people and reject healthy ones.
Renewal rates are independent of your particular loss ratio. They are not tempered, up or down, based on whether they make a profit, fair or not fair, on you.
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