Issue Age Pricing

VT33

Expert
23
Is there any benefit to this pricing model? I have a client who seems obsessed with finding an Issue Age supplement plan. I found one in my market and have never sold it. The starting rate is 20-25% higher than the carriers I usually recommend. Could the client possibly benefit in the long run? The rates still go up over time, just not based on age.
 
The only benefit that I have found is that they may be cheaper starting out, but in a couple of years they are overpriced. That's just my overall experience.
 
Rates are going to go up, you might get a good run with a carrier for a 3 or 5 years and then they go up the next few year faster then others

I have been in buis since 2011 in 17 states, for MOST of those states it is like that

I tell people as long as you are healthy I will try and keep you at the lowest rate every 3 to 4 years

so that when you cannot change anymore you are not already that high

However if someone is GI or OE and very unhealthy, I might show them also a higher rate with UHC because I have had luck with them over a Looong time

They might be $50 or more higher to start, but I have had some since 2014 that are not over $300

With other carriers you are guaranteed to be over $300 in 7 or so years some over $400
 
Is there any benefit to this pricing model? I have a client who seems obsessed with finding an Issue Age supplement plan. I found one in my market and have never sold it. The starting rate is 20-25% higher than the carriers I usually recommend. Could the client possibly benefit in the long run? The rates still go up over time, just not based on age.

When dealing with a client like that has probably had their brain warped from watching too many you tube videos it's best to just give them what they want.

I once had a client in florida who was demanding plan G even though the UHC plan F was available for about 15.00 less than then lowest plan G at the time.Tried to show her the way but she had already made up her mind because you tube had told her the plan G was the best.lol
 
Is there any benefit to this pricing model? I have a client who seems obsessed with finding an Issue Age supplement plan. I found one in my market and have never sold it. The starting rate is 20-25% higher than the carriers I usually recommend. Could the client possibly benefit in the long run? The rates still go up over time, just not based on age.
Caveat, I am not an agent.

I have had an issue age HDF plan for 3 years.

I have had 1 price increase.

When I bought it, its premium was around 90% of the premium of the attained age plan my agent had put me in.

While I can't be sure since I am not in the situation now, I don't think I would want to buy an issue age plan for the premium differential you are talking about.
 
Rates are going to go up, you might get a good run with a carrier for a 3 or 5 years and then they go up the next few year faster then others

I have been in buis since 2011 in 17 states, for MOST of those states it is like that

I tell people as long as you are healthy I will try and keep you at the lowest rate every 3 to 4 years

so that when you cannot change anymore you are not already that high

However if someone is GI or OE and very unhealthy, I might show them also a higher rate with UHC because I have had luck with them over a Looong time

They might be $50 or more higher to start, but I have had some since 2014 that are not over $300

With other carriers you are guaranteed to be over $300 in 7 or so years some over $400
I bought issue age F 7 years ago and premium is now $184, same price they sell to T65. Remains 3rd cheapest for T65 (if I ignore the extra benefits some plans are offering - my plan offers none, not even silver sneakers which is the most common perk with Medigap plans in my region).

Premium usually goes up less than once a year. Sometimes 1.5 years, even longer once. Last increase was approximately one year ago, for 10%.

This firm is not competitive for new entrants over 70, which doesn't affect me. They obviously have never planned to attract members past late 60s.

I guess I'm lucky so far. I'm in a birthday state so I'll switch if things do spiral up.

The fallacy in saying issue age always rises excessively in 3 to 5 years is that means the plan wants no new T65 business, since the premium for someone who enrolled at 65 always remains what they sell to age 65. Perhaps they skirt that by closing blocks of business?
 
I bought issue age F 7 years ago and premium is now $184, same price they sell to T65.

That is the way these plans are supposed to work.

In Georgia, all gap plans are issue age. Companies that don't rotate issuing carriers in and out of the state have more stable rates over time. I have some clients that I wrote 15 years ago who have the same plan. Rates go up with renewal, but almost without exception, the renewal rate is in the hunt with "fresh" rates.

In that time frame we have had about half a dozen MOO carriers come and go . . . same for Aetna. Once the block is closed rates start to increase by double digits, usually within 3 years or so.

And some carriers that were writing business 10 - 15 years ago disappeared and never came back. We currently have about 40 issuing carriers and have probably had 3x that number pop-up over the last 15 years.

It is relatively easy to move the folks who still have a graveyard carrier as long as they are healthy. The others, not so much.
 
I bought issue age F 7 years ago and premium is now $184, same price they sell to T65. Remains 3rd cheapest for T65 (if I ignore the extra benefits some plans are offering - my plan offers none, not even silver sneakers which is the most common perk with Medigap plans in my region).

Premium usually goes up less than once a year. Sometimes 1.5 years, even longer once. Last increase was approximately one year ago, for 10%.

This firm is not competitive for new entrants over 70, which doesn't affect me. They obviously have never planned to attract members past late 60s.

I guess I'm lucky so far. I'm in a birthday state so I'll switch if things do spiral up.

The fallacy in saying issue age always rises excessively in 3 to 5 years is that means the plan wants no new T65 business, since the premium for someone who enrolled at 65 always remains what they sell to age 65. Perhaps they skirt that by closing blocks of business?
In a birthday state they need to remain competitive with pricing for everyone of all ages if they want to hang on to business because of the ability to switch without passing medical underwriting. Typically that affects prices for all. Generally speaking (and of course there are going to be exceptions for multiple reasons) prices for everyone in any plan, across the board, are a bit higher because of that (eg no medical underwriting once a year to switch so those who'd be trapped in a plan due to failing in states without, for example, a birthday rule can switch to a cheaper plan and drive up expenses - as a result premiums need to plan for that).

Also if you are talking about F, someone currently 65 can't buy that so there is no price for someone who is just now 65. The price would be for the person based on their age. The only people who can buy that are those where it was a choice when they turned 65 even if they didn't choose that then and are switching or are applying for the first time due to their credible job insurance they are just now giving out/no longer have. As a result even at 71 they'd be paying the same price as someone who is now 71 but bought it at 65.
 
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