The “1,2,3,4,5 method” of presenting hospital indemnity insurance will change your life, I promise! If it doesn’t, it’s because you don’t want to cross sell and make more money! 🙂
Presenting hospital indemnity with every Medicare Advantage sale is a choice every insurance agent has and unfortunately, most agents choose not to.
“How can you not give 100% when it’s 100% your choice” – Jerry Rice
Why do most agents fall short when trying to cross sell hospital indemnity with Medicare?
- You self-sabotage.
- You focus on the wrong things, i.e., knowing every product detail, knowing every single rider, convincing yourself your clients can’t afford it, etc.
The truth is, we don’t know what we don’t know, and it haunts us. And frankly, nobody has told you it’s okay to not know everything. Guess what, it’s okay!
Sometimes we just need someone to show us a path to follow. So after a data deep dive, the result was the birth of the “1,2,3,4,5 Method”, the easiest way to present and sell hospital indemnity with every Medicare sale.
The “1,2,3,4,5 Method” is a methodology that strips away all complexity for insurance agents to remember how simple hospital indemnity is to pair with Medicare Advantage plans. In a nut shell, you need ONE insurance company that offers a TWO hundred, THREE hundred, and FOUR hundred daily benefit for a total of FIVE days.
Get it? It’s as easy as counting 1,2,3,4,5!
This method will work with 80+% of the plans on the market and now you don’t have to think what to present to your customers.
Let’s take a deeper look and how we figured it out.
Table of Contents
- What is a hospital indemnity plan?
- Why hospital indemnity?
- How to make hospital indemnity easy.
- MAPD copay data findings.
- Top hospital indemnity carriers.
- The 1,2,3,4,5 Method of selling hospital indemnity.
Ready to get contracted and use the “1,2,3,4,5 Method” for selling hospital indemnity plans?
What is a hospital indemnity plan?
A hospital indemnity plan (HIP) is a supplemental health insurance plan offered by an insurance company that pays a daily cash benefit when a policy holder is hospitalized. And, it’s one of the most common supplemental coverage options for those with Medicare Advantage plans.
HIP plans live in the ancillary category along with cancer and accident insurance.
These supplemental health insurance plans are specifically designed to correlate with the daily hospital copays on Medicare Advantage plans and according to CSG, hospital indemnity sales are projected to more than double between now and 2028.
Why is hospital indemnity important to your agency?
There are two main reasons hospital indemnity is important.
Retention is 100% why you should make selling hospital indemnity a priority.
If you have been paying attention to the biggest players in the Medicare market, you’ll know there has recently been a 27% reduction in the lifetime value of a Medicare Advantage sale, and retention is to blame.
If we’re on the subject of using statistics and data to our advantage, remember the time-tested industry basics around more policies in a household can nearly double your retention rate.
Moral of the story here is intentional retention!
HIP plans are hand in glove with MAPD and it will always make sense to the customer when you are showing them the features and benefits.
Happy customers stay on the books longer, that’s a fact!
This is simple math.
If you write 200 MAPD policies per year and sell 40% of those a hospital indemnity plan, you can expect to earn an additional $20,000 per year without having any additional, travel, meetings, and most importantly, customer acquisition costs.
How to Make Cross Selling Hospital Indemnity Easy
First, let’s highlight a few key statements that everyone needs to hear so we’re all on the same page and starting from the same place as we discuss this easy way to present and cross sell hospital indemnity.
- Cross selling can and is confusing to most insurance agents, you’re not alone.
- Learning to add various product riders just adds to the confusion.
- Standardizing the presentation process is what everyone wants and is the key to sales success.
We’re going to focus on number 3 and turn this into the easiest way you can increase your revenue immediately and provide an even strong customer experience.
My approach to selling always follows these 5 steps.
- Understand the market
- Understand the niche
- Leverage data and statistics
- Pick a core carrier
- Standardize the sales process
The good news, I have done this work for you already and will show you exactly what I found.
Understanding this process will help you reframe and realize you don’t need to know every detail in a product brochure. Your confidence of your customers needs will outweigh your insecurity of knowing which rider to choose or which daily benefit amount someone can afford.
This is a perfect example of the power of the process, a concept that so many people in sales have talked about for so long. Let’s not reinvent the wheel! 🙂
Understand the market and niche
According to CSG, “Senior HIP products are specifically designed to fill in the gaps of Medicare Advantage products and so the target market for Senior HIP products is the Medicare Advantage market.”
Senior market targeting Medicare Advantage customers is where we focus.
First, reviewed every single Medicare Advantage plan across the country by plan type and county. This data is publicly available on the CMS website, just search for the plan landscape file.
This is what we found.
MAPD Hospital Daily Copays
- 35% of all MAPD plans have hospital copays between $200 and $300.
- 30% have hospital copays between $300 and $350
- 19% have hospital copays between $355 and $400
- Grand Total – 84% of all MAPD plans have hospital copays between $200 and $400 per day!
Wow, we just validated our niche.
84% of all Medicare Advantage plans have a significant gap that poses a real and meaningful financial risk to policy holders should they become hospitalized.
There is a high likelihood the majority of your clients fall into this 84%.
The most important thing we looked for was the average length of stay in a hospital.
According to the Agency for Healthcare Research and Quality, the average hospital stay is 4.5 days.
Now we’re getting closer to standardizing our presentation process. We can officially help project our customers average cost for an average hospital stay based on statistics.
Daily Hospital Copay x Average Length of Hospital Stay
However, we now need plans and pricing information to create a simple and standardized sales process that is scalable and easily implemented.
So, we relied on the CSG hospital indemnity market study.
Who are the top Hospital Indemnity carriers?
- GTL – Winner Winner Chicken Dinner!
- Continental Life (Aetna) – I’m also a very big Aetna fan.
- Heartland National Life
- Bankers Fidelity
- Sentinel Security Life
According to the CSG Hospital Indemnity Market Study, GTL is the leading carrier by more than 6.5X the second and third place contenders.
Make it easy on yourself and go with the top carrier in the market to get started, you can always choose another option down the road once you’re confident and successful with your sales process.
My first choice is GTL and that is who I would recommend you use too if you want to get off to a fast start with a financially sound company for your customers.
Would you like more training on cross selling hospital indemnity?
What is the average premium for hospital indemnity?
$474 per year is the average annual premium across the seven carriers listed above.
In staying true to the data, we are going to make our presentation model based on $474 as the benchmark.
GTL Hospital Indemnity Rates
This is the last step of leveraging data and statistics before launching your sales process.
Let’s first recap the most important stats we’ve found know so far.
- 84% of all MA plans have hospital copays between $200 and $400
- 65% of all MA plans have hospital copays between $200-$350
- Average hospital stay is 4.5 days
- Average annual premium is $474
Now let’s get to what everyone is wondering, will this be affordable to your customers?
We reviewed the base benefit rates for GTL Advantage Plus Elite.
- $200, $300, and $400 daily hospital benefits (this solves for 84% of all available MAPD plans).
- 5-day benefit period (remember the average stay is 4.5 days).
- Compared each segment to the $474 national average as identified by CSG.
- Compared each segment to the common sales language of “you can spend $1 per day or less”.
GTL Rate Review
Here is what we found:
$200 daily hospital copay / 5 day hospital stay
- Annual premium is under the national average of $474 for ages 40-85 100% of the time.
- Monthly premium is less than $1 per day for ages 40-85 100% of the time.
$300 daily hospital copay / 5 day hospital stay
- Annual premium is under the national average of $474 for ages 40-85 86% of the time.
- Monthly premium is less than $1 per day for ages 40-85 57% of the time
- Monthly premium is less than $1 per day for ages 40-76 100% of the time
$400 daily hospital copay / 5 day hospital stay
- Annual premium is under the national average of $474 for ages 40-85 52% of the time.
- Monthly premium is less than $1 per day for ages 40-85 29% of the time.
- Monthly premium is less than $1 per day for ages 40-69 100% of the time
As you can see, the data is very clear and allows you to drastically simplify the process of implementing hospital indemnity into your Medicare sales process.
What is the 1,2,3,4,5 Method of Selling Hospital Indemnity?
The moment of truth!
It’s easy, just look at your hand and count to five.
1, 2, 3, 4, 5!
That’s it and here is what it means.
- 1 standardized option with 1 carrier.
- $200 per day
- $300 per day
- $400 per day
- 5 day benefit.
This one standardized offer will work with 84% of all plans in the country, drastically simplifying your life and making implementation of hospital indemnity incredibly simple.
Statistics don’t lie, use them to your advantage.
Knowing that 84% of all MAPD plans have hospital copays between $200 and $400 and the average hospital stay is 4.5 days, you no longer have an excuse to not do this because it eliminates your need to have to “figure” out what to present when you’re at the kitchen table.
Ready to transform your sales by using the 1,2,3,4,5 Method for selling hospital indemnity?
Cross selling hospital indemnity isn’t trendy, it’s a vital component to delivering an exceptional customer experience.
- 84% of all MAPD plans in 2022 have hospital copays between $200 and $400.
- The average hospital stay is 4.5 days.
- The average premium is $474.
Using the data to drive your discussions not only simplifies your process but also helps you build credibility with your customers. When you know the data, and more importantly, how to communicate the data to your customers, you help strengthen their confidence in choosing you as their agent.
Keep things simple.
Use one default offer as your starting point to present hospital indemnity and you can add the bells and whistles once you’re comfortable with the process and have made it a habit in your presentations.
Give this a try and let us know how it works for you!