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Working Within Your Client’s Insurance Budget

Working Within Your Client’s Insurance Budget

Everyone needs insurance to help protect them, and their family members, from financial loss when something unexpected happens:

  • We need health insurance to help pay our medical bills when we’re sick or injured.
  • If we’re unable to work due to an extended illness, disability income and supplemental insurance can help replace our lost wages and fill some of the gaps in our health coverage.
  • When we pass away, final expense policies can cover funeral costs, doctor bills, and more, while life insurance can provide long-term security for our loved ones.

There’s a problem though; many people are on tight budgets and don’t think they can afford the extra coverage. Agents who understand their clients’ financial constraints would make recommendations that will provide the best protection possible at a price their customers can afford – to help stretch those dollars.

However, some agents specialize in a single product, like major medical insurance, and then sell plans that eat up their clients’ entire insurance budget, leaving no room for other valuable coverage — leaving clients with significant financial exposure.

For example, a prolonged illness can result in some pretty hefty medical bills that will easily push an insured in to hitting their health plan’s out-of-pocket limit sooner than expected. This is true whether it’s a comprehensive plan with a low deductible which also offers copays for doctors’ visits and prescription drugs, or a high deductible, HSA-compatible health plan. Both plans provide catastrophic protection with a maximum out-of-pocket limit for the insured, but the low-deductible plan usually comes with a much higher monthly premium that may “crowd out” options for added coverage.

If the individual chooses a high deductible health plan and uses the monthly savings to purchase an accident and critical illness plan or even disability income protection, they could get some additional help with the other expenses that come with missing work or to help cover costs their major medical insurance does not. Or they could choose a plan that will protect their families if they pass away as a result of the illness, the family would benefit from a final expense plan or a life insurance policy.

It is true that everyone’s situation is different and we need to consider a client’s income, medical conditions, prescription needs, select providers, and risk tolerance level before we make a health insurance plan recommendation. It’s also true though, medical bills aren’t the only thing people need to worry about if they get sick or have an accident. There are many costs that we don’t often think of, like child care, travel expenses, or even groceries. You as the expert need to keep all this in mind when making a recommendation to your clients

If you’d like to learn more about the other products you should be discussing with your clients, give AHCP a call today. We can help you round out your product portfolio.

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