When you turn 65, buying a Medicare supplement seems like a relatively easy task, but most people are not aware that this decision can be a 20 to 30 year partnership. When you turn 65, you become eligible for social security programs. Medicare parts A and B. These programs cover 70% to 80% of your health care expenses, leaving a difference of 20% to 30% on most bills, that’s where your Medicare Supplement insurance comes from. You can sign up for supplemental insurance 6 months before and 6 months after your 65th birthday, with no health questions asked. This means that you are guaranteed which company you choose.
Choosing the right insurance company for you can impact your finances for years to come. First you need to understand that all insurance is there is a way for people to deposit their money together so that when someone makes a claim, the pool money will pay it off. There are 2 types of insurance companies to choose from for your supplements, brokers and captive companies and they work in different ways.
Broker companies allow anyone licensed to sell their products and captive companies only allow their own agents to sell their products. Now broker companies need a way to entice customers to join their pool and the way they price, it seems that you are getting a better deal for your money. These pools are initially run at a loss to get more customers, but when people get sick and the company has to pay claims that have only one option, you have to pay for those initial losses. Premium has to be raised. This increase in premium is not a big deal if you are healthy because you can always switch to another insurance company but if you are sick or cannot pass the health related questions of the new company then you have with your current plan. There is no option to stay and pay. increases. It also alleviates the problem because as soon as healthy people exit the pool the number of people paying in the pool becomes smaller and smaller and they are in declining health. So in general if you sign up with a broker company, you will have to increase your premium by 30% to 80% in the first five years for the initial loss.
Captive companies only allow their own agents to sell their products and generally have very large pools. These companies charge more initially, but the annual increase is usually 5% to 15%, so for people on a fixed income it helps to give you a better budget as you get an idea of your annual or monthly premium every year. is.