How Do YOU Explain Rate Increases?

[BillyC]

I had a prospect who was leaning toward the company I was pitching, and was the reason he invited me to present,
I was so sure that I would then get the sale,
He definitely was the decision maker, He did a lot of homework and had a packet from "SHIP" that listed 3 pages of Med Sup rates for a male, 65-70-75

He didn't have any objections to the price I offered but told me he wanted to do more research on Rate Increase Histories of companies.

It seems this is a topic I don't explain well, other than "all companies get them"

However, a Physicians Agent told him that their rates are "locked in" If that's REALLY true I'd quit and work for them!

My Question:

HOW DO YOU EXPLAIN RATE INCREASES in a way that makes a prospect comfortable signing on the line that is dotted?

Thanks in advance fellas.

 

[goillini52]

I had a prospect who was leaning toward the company I was pitching, and was the reason he invited me to present,
I was so sure that I would then get the sale,
He definitely was the decision maker, He did a lot of homework and had a packet from "SHIP" that listed 3 pages of Med Sup rates for a male, 65-70-75

He didn't have any objections to the price I offered but told me he wanted to do more research on Rate Increase Histories of companies.

It seems this is a topic I don't explain well, other than "all companies get them"

However, a Physicians Agent told him that their rates are "locked in" If that's REALLY true I'd quit and work for them!

My Question:

HOW DO YOU EXPLAIN RATE INCREASES in a way that makes a prospect comfortable signing on the line that is dotted?

Thanks in advance fellas.

I was with PMIC for a couple of years and their rates are not locked in...nobody's is. PMIC has both issue age and attained age rates. I'll bet he was referring to the issue age rate being "locked in" to whatever age he was when he bought the policy.

PMIC has some of the highest rates out there. Their issue age policy sells for more than $30 a month more than their attained age policy for age 65 Plan F(used to be $5 a month difference).

I've seen it with PMIC and before that with UA...the issue age caught up with the attained age. Sounds good...but doesn't seem to work.

You should get CSG Actuarial, then you can show them the rate histories.

 

[agentjhc]

You should get CSG Actuarial, then you can show them the rate histories.

This ^^^^^

Although I don't believe CSG has info on all companies.

 

[goillini52]

This ^^^^^

Although I don't believe CSG has info on all companies.

They don't have rate history info on the companies that choose not to share that info...such as PMIC.

 

[agentjhc]

They don't have rate history info on the companies that choose not to share that info...such as PMIC.

True....might tell you what you need to know about the company!

 

[somarco]

CSG rate histories are averages which are essentially worthless.

If a carrier dropped rates 40% 4 years ago then increased rates 10% for each of the next 3 the average increase is negative.

 

[russelltw]

In your case this is what I would say:

"This agent is either misinformed or misleading you. First all companies have rate increases. Entry age sounds like a rate is "locked in," but in reality, even entry age pricing has rate increases. [Explain entry age in as much detail as the client wants]

Secondly, Medicare changes the copays and deductibles every year. Companies have to make adjust rates to accommodate those changes. There is no way a company can keep their rates the same as Medicare changes. Those changes can be significant over a 10 year period and no company is going to take that kind of risk over that period of time or longer.

If you want a third opinion, let's call the state depart. of insurance customer service together and ask what the rate increases of this company have been over time. If that's not available, we'll ask if a medicare supplement company has EVER had a rate that never changes. If they cannot give us that data, let's explain that an agent has dropped by and led you to believe that they never change their rates."

You could call your Dept of insurance beforehand to see if they can provide this information.

If you think this might be an ongoing issue with this carrier, start collecting their rates to show future clients.

 

[goillini52]

CSG rate histories are averages which are essentially worthless.

If a carrier dropped rates 40% 4 years ago then increased rates 10% for each of the next 3 the average increase is negative.

I agree with you, the average is a joke in many cases. Many will show several years of rate history so you can see what they did along with the average.

 

[LewB]

In your case this is what I would say:

"This agent is either misinformed or misleading you. First all companies have rate increases. Entry age sounds like a rate is "locked in," but in reality, even entry age pricing has rate increases. [Explain entry age in as much detail as the client wants]

Secondly, Medicare changes the copays and deductibles every year. Companies have to make adjust rates to accommodate those changes. There is no way a company can keep their rates the same as Medicare changes. Those changes can be significant over a 10 year period and no company is going to take that kind of risk over that period of time or longer.

If you want a third opinion, let's call the state depart. of insurance customer service together and ask what the rate increases of this company have been over time. If that's not available, we'll ask if a medicare supplement company has EVER had a rate that never changes. If they cannot give us that data, let's explain that an agent has dropped by and led you to believe that they never change their rates."

You could call your Dept of insurance beforehand to see if they can provide this information.

If you think this might be an ongoing issue with this carrier, start collecting their rates to show future clients.

I have only been in this business a few years and I called my state's dept of insurance to try to get rate increase history and was told that Colorado Dept of Insurance does not provide that info.

Maybe its just me but you think that any states department of insurance would provide that information to consumers.

 

[somarco]

Actually, I would expect the carriers to have it before the DOI. Finding past rates online is impossible. You can dig thru the various MOO carriers and get percentages but not actual rates.

You would think they have something to hide.