By Jon Hamilton, Vice President of Strategic Solutions for Insurance Dialogue
There are 10,000 Americans that turn 65 every day. This increasing influx of aging Americans is the long-awaited onslaught of the Baby Boomer generation, a trend that is expected to continue for the next 19 years.
The question is: what are the bank-insurance partnerships doing to capitalize on this increase in ranks of seniors? Are banks and their partners taking stock of the products traditionally sold to people older than 65? Products like Medicare Supplement, Graded Death Benefit Life and Hospital Indemnity are still successfully sold in this market, but not by many banks. Beyond these traditional products for seniors, banks and their partners should also think about new products that will appeal to this market. Many of them going on Medicare for the first time will be prime prospects for drug plans, dental and eye care plans, and diabetes products.
Baby Boomers trust their bank, which means that banks are uniquely positioned to help Baby Boomers make the many decisions that will affect their financial future. One key place that banks can be of assistance is in the Medigap market.
The Medigap Market
As people approach their 65th birthday, they are bombarded with information about Medicare and the various options promising to give them full protection. Most of this information comes to them through direct mail or the Internet. Unfortunately, the sheer volumes of these communications lead to confusion or frustration. These clients are looking to have it all made simpler. For these people, a much better solution would be to get the information and eventually the policy from someone they trust--their bank!
Taking advantage of this trust relationship by expanding it into the Medicare advisory role enables banks to help their customers make better decisions, increase their “share of wallet” with baby boomers and earn commissions in the process. All it takes is partnering with the underwriters who provide the best Medicare options through an intermediary well versed in these options.
Next week, we will turn to part 2, which will give some basic information about the Medicare market and some thoughts for banks to consider when choosing a sales partner.