Low-cost supplemental accident products may not be part of your portfolio now — but now is an appropriate time to consider including them. Not only do clients need supplemental accident coverage more than ever, the sale of these products is a chance to offset recent agent commission losses.
The full impact of health care reform won’t be felt until 2014 — but as many of us know all too well, major carriers have already dropped commissions to counter the increase in minimum loss ratio requirements that took effect for certain products on Jan. 1, 2011.
The good news is that supplemental products are not subject to the minimum loss ratio requirements and therefore, for the most part, commissions for these products haven’t been cut.
Health care costs continue to rise and end-user clients — American families — continue to struggle with how to pay for them. As a result, many clients have turned to policies with higher deductibles to secure reduced monthly premiums. Policies have become stingier, too. In some instances, I’ve noticed that a health care expense or prescription drug that was covered five years ago isn’t always covered under policies today, or covered to the extent it formerly was.
Added protection at affordable prices
Now more than ever, accidents can be a significant financial burden. Supplemental accident products can provide protection and peace of mind at an affordable price point. That’s important to share with clients, because while many consider themselves to be in good health, they worry about the cost of accidents, especially if they have active children. If a kid falls off a bike, it’s easy to incur a pricey emergency room bill.
But medical costs aren’t the only expense associated with accidents. Let me share an anecdote from a friend. He has a 13-year-old son. Like many adolescent boys, this kid doesn’t necessarily listen. Call it a “teenage phase,” raging hormones or whatever — but tell him not to do something and he’s probably going to do it. Recently, he was in a physical education class led by a substitute teacher who instructed the group not to take off their tennis shoes and not to run in the gym. This young man immediately shed his shoes and initiated a foot race across the gym with a classmate — and (going too fast to stop, considering he was in socks, but no shoes), slid right through the wall of the building.
He fractured three bones in his foot and his parents were stuck with nearly $3,000 in expenses given that they had not previously met their health plan deductible.
Coverage that makes $ense