Looking for niche market in today's economy, suggestions please!

[GreenSky]

Admittedly, I haven't looked at CI policies in a while. In the "early days" there was only one CI policy worth having . . . MOO.

The MOO plan was health insurance while the others were life insurance based.

The MOO plan was more expensive, more difficult underwriting but had a greater likelihood of paying out. (Read the definitions and compare).

The biggest benefit to the MOO plan (in addition to the definitions) was the tax favored status. As a health policy, benefits received were tax free.

The life based plans usually created a taxable event unless you were terminal.

I doubt if any agents selling CI address these issues, especially the taxable benefit of most CI plans.

I like Assurity as it is health based but never thought about the tax consequences of the life based policies.

Although I'm not in the DI market, I thought those benefits were tax free if the premium was paid by the policyholder (and not deducted). Why is CI any different?

Rick

 

[Winter_123]

The MOO plan was more expensive, more difficult underwriting but had a greater likelihood of paying out. (Read the definitions and compare).

Underwriting can vary as with life insurance. Sometimes they give a little and sometimes they dont. I had a case recently where the client has grand mal. Assurity wouldnt take him at standard but MOO did.

Winter
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I like Assurity as it is health based but never thought about the tax consequences of the life based policies.

Although I'm not in the DI market, I thought those benefits were tax free if the premium was paid by the policyholder (and not deducted). Why is CI any different?

Rick

I don't think individually owned true critical illness plans are taxable assuming the usual, that they were paid by the policy owner with after tax dollars.

Somarco referred to some of these hybridized life insurance policies that have a critical illness rider or can function as a critical illness plan in addition to providing life insurance depending on which life event occurs. In that instance I think they are the critical illness feature is treated as a cash disbursement or payout from a life insurance policy which is taxable provided that it is not a loan or an accelerted death benefit. In other words, these policies function as life insurance policies rather than critical illness plans.

My take anyway. Most likely I am wrong.

Winter

 

[Frank Stastny]

I am currently in the senior medicare market, the red tape is making this large volume population almost impossible to service.

I totally disagree with you. You are only looking at Part C of Medicare. That isn't all there is to Medicare.

I have been selling Medicare Supplements for fifteen years and never, not once, has the economy or government regulations/"red tape" ever hindered me from being very successful selling Med Supps.

In a couple of years you are not even going to recognize Part C plans. If that is all you are selling then it is best that you get out of it now. Probably should have gotten out last year the way things are going.

So many times agents have told me that there is no logical reason to try to sell Med Supps between Thanksgiving and Christmas. Every year since I have been in this business December has always been one of my best months.

Med Supps have to be sold so the agent needs to be a lot more knowledgeable about Medicare and Medicare Supplement policies. From that standpoint Med Supps can be more difficult for agents to sell who have not done their homework.

If you have been in the senior market for any appreciable length of time I assume that you already know that.

 

[GreenSky]

I thought the zero premium life market was wide open since Ali left.

Rick

 

[somarco]

I think they are the critical illness feature is treated as a cash disbursement or payout from a life insurance policy which is taxable provided that it is not a loan or an accelerted death benefit. In other words, these policies function as life insurance policies rather than critical illness plans.

That is correct.

Some of the early policies were either riders to life policies, or plans built on a life chassis. Seems like the Colorado Bankers plan was a 10 yr term CI plan. Not a rider, but a policy.

When the CI is written as a life plan you get into the accelerated death benefit issue which can be a taxable event. This is not the case with CI health policies.

If you drill down through the policy definitions, you will see that plans have specific definitions for what qualifies as a covered event. In the case of a heart attack, they usually require proof of damage to the heart muscle. Seems like one plan even put a percentage of damage to the heart muscle before they would pay.

Same thing for cancer.

Cancer in situ pays a much smaller benefit than cancer that has metastasized. Also, some of the plans terminate once the benefit has been paid.

If you have a qualifying heart attack the policy pays then terminates. If you later have cancer, tough luck. Or if you have cancer and a heart attack you only get paid on one item.

Some of the CI plans had term limits (such as 10 yrs) while others stopped at age 65. Others could be kept as long as you paid the premium.

As I said, I have not looked at plans in a while and it is possible the 2nd (or 3rd) generation plans are much improved.

I haven't done F2F sales in a long time, and I did not find the CI plans to be an effective sale over the phone.

Perhaps others can shed some light.

 

[Charpress]

If I was going after a class of insurance rather than a type of client as a "niche", I think I would maybe concentrate on long term care insurance. I sell a bit of it just as a sideline when it turns out I can't get an annuity sale.

But there is nothing wrong with a $2,000 or more commission and decent residuals on a fairly easy sale. If you get Senior Market Advisor magazine, they have excellent articles on LTCI including a whole series on how to do LTC as a niche practice. You can probably read the articles online if you don't get or keep the magazine.

One of the best possibilities on LTCI these days, if you really want to work hard, is to go after employers to offer LTCI as a benefit. That is where some big money could kick in.

The only thing I don't like about LTCI is the underwriting. I've lost many cases because either husband or wife is declined.

 

[JRoot]

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[Aaron_4SIGHT]

What about going after recently laid off people looking to cut costs? Seriously... It's a growing niche, and they're evaluating their spending. Could be opportunity.

 

[Charpress]

What about going after recently laid off people

That is also an opportunity to help folks roll over their 401(k) into something safe. With most plans, job termination means the 401(k) is up for grabs.

 

[Salary_Guard]

how about helping people plan financially before they get laid off. 1 in 4 american workers are worried about losing their job. (report released yesterday) If you could tell all of your existing clients from over the years that there is a way for them to receive an additional $1500 per month if they lost there job, would any of them be interested? That is a great way to keep in touch with your clients, and show them that you are looking out for them. This unemployment protection plan is done online, over the phone or in person. The application is simple, and the commissions are monthly for as long as they carry the plan.

How many clients have you gained over the years? 200 a year? thats a large number of people that already trust you and know you, and a great start for your marketing this very relevent protection.