How to Successfully Sell Hospital Indemnity Insurance
Senior Market Advisors: An Insurance FMO
Senior Market Advisors is a field marketing organization that markets, sells, and distributes many different insurance products, including hospital indemnity insurance.
We offer our agent partners a diversified product portfolio, top-tier commissions, eContracting capabilities with leading carriers, product knowledge & training, and more.
The way we do business is fundamentally different. We take an unbiased approach to insurance sales and encourage engagement between our agent partners and our sales and marketing staff. Senior Market Advisors wants to provide you with the best tools and practices to grow your business.
What is hospital indemnity insurance?
Hospital indemnity insurance is a form of supplemental health insurance that is designed to help cover the costs associated with a stay in the hospital.
These costs can rack up quickly and even robust health insurance plans will have some gaps in coverage. In fact, the average cost of a hospital stay in the U.S. is over $15,000. That’s where hospital indemnity insurance can help.
Hospital indemnity plans may be sold under a variety of different names, including hospital insurance, medical indemnity, or hospital confinement indemnity insurance. This coverage is available for the whole family or through hospital indemnity plans for individuals.
Is hospital indemnity a cancer plan?
Cancer insurance is another type of supplemental insurance plan that can help pay for costs related to cancer treatment that are not covered by primary health insurance. There are some similarities between cancer plans and hospital indemnity plans, but they are distinctly different in many ways.
For example, both types of insurance pay their cash benefits directly to the beneficiary. But with hospital indemnity insurance, beneficiaries receive a set amount for every day they are confined in a hospital, whereas cancer insurance benefits are usually paid in a lump sum upon diagnosis.
Additionally, most cancer plans will also require a long period of being cancer-free before enrolling, sometimes up to 10 years. Hospital indemnity plans with a Cancer Rider usually have a much shorter requirement period of around 3 to 5 years.
Why agents should be selling hospital indemnity
Hospital indemnity insurance is easily one of the easiest cross-selling opportunities for Medicare Advantage agents. Medicare provides great benefits but still has many gaps in its coverage, and even most Medicare Advantage plans will not cover the first few days of hospitalization.
This means many Medicare recipients may be looking for additional supplemental insurance, and a hospital indemnity plan can help fill in these coverage gaps by paying a cash benefit directly to the beneficiary.
It’s a no-brainer: if you’re currently selling Medicare Advantage, you should also be selling hospital indemnity plans.
The benefits of working with an insurance FMO/IMO
Whether you’re a rookie agent or an industry vet, partnering with a marketing organization could make all the difference when it comes to hitting your year-end sales goals.
There are many different names for insurance marketing organizations, including:
- Field marketing organization (FMO)
- Independent marketing organization (IMO)
- National marketing organization (NMO)
The names may differ but they all operate in much the same way: providing their agents with the products, leads, training, tools, and back-office support they need to succeed.
While an independent producer may be able to sell certain products, most of the top-tier insurance carriers will not allow direct agents to contract without an FMO.
Your health insurance IMO or FMO will work directly with carriers to get you access to certification, credentialing, and contracting for products not offered to independent producers.
Understanding hospital indemnity insurance
In order to sell effectively, a salesperson needs to have a firm understanding of their product. Medical insurance like hospital indemnity is no exception. Take some time to read up on the ins and outs of hospital indemnity plans before you start selling them.
How hospital indemnity insurance works
Hospital indemnity plans pay out a cash benefit directly to the policyholder for each day they are confined after their hospital admission. The dollar amount of the per diem payment will vary from plan to plan, as will the benefit period over which these payments are made.
Some plans will feature an elimination period of up to 30 days before the policyholder can receive their benefits if an illness led to the hospital admission, but exceptions are made in the case of accidental injuries.
Other plans may have no elimination period at all, so be sure to study all the requirements and benefits of every plan you want to sell.
What indemnity health insurance plans cover
In general, hospital indemnity plans will cover the cost of a hospital stay and other inpatient hospital services, including surgery or ICU confinement.
But depending on their choice of plan and riders, a policyholder can be covered for a wide range of other services, including but not limited to:
- Continuous care
- Emergency room visit
- Ambulance transportation
- Skilled nursing facility visit
- Chemotherapy, radiation, and other cancer treatments
Costs of a hospital indemnity plan
Hospital indemnity insurance is extremely affordable while still covering many out-of-pocket costs. Some basic plans can cost as little as $5 a month. The actual monthly premium will vary based on several factors like:
- Plan choice
- Beneficiary age
- Beneficiary gender
- Tobacco use
For just a little extra money every month, hospital indemnity beneficiaries can be assured they’ll be covered when it comes time for co-pays, out of pocket expenses, and other medical costs accrued during a hospital stay.
How to get started selling hospital indemnity plans
If you’re already selling Medicare Advantage, you have the perfect opportunity to start selling hospital indemnity insurance. The coverage gaps inherent to Medicare provide a great way to introduce hospital indemnity insurance to your client.
As you explain the details of each Medicare Advantage plan during your sales presentation, be upfront about the coverage gaps of each option. Then explain to your client how hospital indemnity insurance can help pay for the out-of-pocket expenses and copays not covered in their chosen plan.
If you already have existing Medicare Advantage clients in your book of business, offer to check in with them to address any questions or concerns. During this check-in, try introducing hospital indemnity and other ancillary products to address gaps in their coverage.
Are there any rules on selling hospital indemnity plans?
In order to sell a hospital indemnity policy during a Medicare Advantage sales meeting, your client will need to check the hospital indemnity related box on the Scope of Appointment form.
Fortunately, same-day compliant scopes have been allowed since 2018. Remember to explain to your client how hospital indemnity can work together with Medicare Advantage to give them more coverage before they complete the Scope of Appointment.
Is hospital indemnity insurance right for my client?
When you bring up hospital indemnity insurance, your new or existing clients may ask, “Is hospital indemnity worth getting?” The answer in many cases is “Yes!”
Hospital indemnity policies can be sold to people of any age, and are a great option for any individuals or families who are concerned about high copays and out-of-pocket costs. There are a lot of other factors that can make hospital indemnity insurance worth it for your clients, such as:
- If they are worried about lost wages while confined to the hospital.
- If they have a child or other family member that is prone to injury or illness.
- If they have health insurance with a limited network.
- If they own a small business and want to offer an additional benefit to employees.
- If they have a high deductible health plan.
Selling hospital indemnity coverage to Medicare clients
Hospital indemnity insurance can also be helpful for Medicare eligibles and beneficiaries, especially those who may be on a fixed income. Even enrollees with $0 premium Medicare Advantage plans likely struggle with high deductibles and copays. A hospital indemnity plan could be the perfect way for them to fill in their coverage gaps for an affordable price.
If you’ve been successful as an MA producer, you may wonder “Is selling hospital indemnity with Medicare Advantage worth it?” Absolutely! Hospital indemnity is an ideal cross-selling opportunity for Medicare Advantage agents and can bring in as much as double the commission for each plan you write.
Tips to increasing hospital indemnity sales
One of the best times to sell hospital indemnity insurance to supplement Medicare Advantage is during follow-up appointments with existing clients after the Open Enrollment Period.
Next time you meet with an existing client, go through all the details of their Medicare Advantage plan with them, and identify the gaps in coverage that are still left. Then, you can help them customize a hospital indemnity plan to fill in those gaps using additional riders and benefits.
If you want to sell hospital indemnity during a sales presentation with a new client, be sure to bring it up at the beginning of your meeting. This way, they can agree to it on the Scope of Appointment and won’t be too tired at the end of the meeting to listen to your pitch.
Rewards for selling hospital indemnity plans
There are many side benefits to selling hospital indemnity, aside from more commissions. For one, those extra commissions will be paid to you weekly during AEP, so you won’t have to wait until January to cover your costs.
While some carriers require an application fee to enroll a client, others actually offer bonuses for each application you write. Certain carriers offer additional bonuses for agents who use their electronic application process instead of submitting paper applications.
In the last few years, hospital indemnity sales have continued to grow along with other supplemental health insurance. Now is a great time to add hospital indemnity products to your portfolio, especially since your competitors may already have!
Hospital indemnity insurance carriers
More carriers are offering hospital indemnity insurance than ever before, including many of the large national players like Cigna and Guarantee Trust Life. The hospital indemnity insurance Aetna offers is one of the most popular options, as is the AARP Hospital Indemnity Plan sold by United Healthcare.
Every plan will have different requirements, premiums, and benefits, so be sure to learn what is required by each insurance company you want to contract with.
Why Senior Market Advisors should be your FMO
When it comes to selling hospital indemnity, you want to partner with an experienced, educated FMO that truly cares about your success. We support our agents by providing access to the best hospital indemnity insurance plans, and the contracting and training it takes to sell them effectively.
SMA was founded by insurance agents for insurance agents. Our CEO, Jeff Pita began his career as an independent insurance agent, so he knows the hard work it takes to be successful. Above all, he and the SMA team are dedicated to people over profit.
What We Offer Our Independent Agents
- Top-tier commissions
- Diversified product portfolio, including hospital indemnity
- eContracting capabilities with leading carriers
- Product insight
More information and resources for insurance agents
Want to know more about selling hospital indemnity? Check out these other great resources on hospital indemnity sales:
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