Short Term Medical: Insurance for Life in Transition
- By Shane Milner
- November 17, 2015
Short term medical (STM) insurance is the easiest product you have ever sold. In this article, we’re going to cover what it is and why you should be selling it.
What is Short Term Medical Insurance?###
Short term medical insurance is temporary medical insurance designed to fill the gaps in coverage for individuals and families during a transition. They last anywhere from 30 days to 364 days and the client can receive the policy instantly. It works like traditional medical insurance with premiums and deductibles. Once the plan is in place, your initial claims go to the deductible and after the deductible is met these plans pay 100% of the expenses involved.
Why sell Short Term Medical Insurance?###
“Why” can be a hard question to answer but in this instance it is really simple. Your clients and prospects need to protect themselves and their families. That is really what all insurance is about - finding a way to reduce our exposure to risk. Unfortunately, people are complicated and ignore what is right in front of them.
The great and wise philosopher Tommy Lee Jones once said, in the movie, Men in Black, “a person is smart, but people are dumb.” If you have spent much time in insurance, you know that is true.
So how do you overcome this tendency? You need to keep the value proposition easy to grasp.
- STM covers a major hole in many people’s financial life
- STM is cheap compared to the alternatives
- STM can be purchased quickly and easily
As an insurance agent, helping clients plug major financial holes quickly and with a relatively low premium is an effective value proposition for anyone.
How easy is it, really?
For one, there are no medical questions involved and the client can sign up and pay directly online. Agents even have the ability to set up their own web page with a built-in quote engine, this allows your clients to get accurate information and to sign up without any hassle.
Who is right for STM insurance?###
- Clients who are in between jobs or who are starting a new job and have a waiting period until their employer paid plan kicks in are excellent candidates.
- Clients turning 26 and coming off of their parents major medical plan will need STM until they purchase or receive coverage from another source.
- Some clients who are close to receiving Medicare may want to purchase an STM policy instead of paying the outrageous prices for major medical.
How to position STM##
People who understand STM love it because of the low costs involved and the ease of buying it. Your clients will find that their premiums can be as low as half the price of a major medical policy.
Clearly communicate that it helps the average family deal with the continuously rising costs of major medical insurance. Make sure they understand that they can cancel the policy at any time, making the transition into new coverage very easy.
Lastly, one of our responsibilities as an agent is to remind people that accidents do happen. Hoping they only happen to someone else is not a good long-term financial plan. Being covered during transitional periods can keep a difficult situation from becoming a disaster.
*It is important to disclose that short term health plans do not meet the minimum essential coverage requirements under the Affordable Care Act (ACA) and may result in a tax penalty. They are designed solely to provide temporary health care insurance during unexpected coverage gaps.