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What is Term Life Insurance

Health insurance is crucial for the well-being of individuals and families. Health insurance professionals play a pivotal role in guiding clients to the proper coverage. Providing comprehensive solutions and various options beyond traditional insurance plans is essential. One option that deserves attention is term life insurance. Keep reading to learn more about what it is and why it is an invaluable asset. 

Understanding Term Life Insurance

Term life health insurance, also referred to as term health insurance, is a unique type of coverage that varies from traditional health insurance plans. While traditional health insurance plans cover you for a year, extended term plans offer longer durations, often up to three years or more. The extended policy is a safety net for policyholders, especially in uncertain times. 

Key Features of Extended Term Insurance

There are several key features of this type of insurance plan that should be explained to clients, which we break down below to ensure whenever selling this type of insurance, you can fully explain it to clients and determine if it’s the right fit for them. 

  • Coverage Duration: As noted above, extended term insurance offers longer coverage, ensuring that policyholders have continued access to healthcare services. 
  • Eligibility Criteria: For brokers, understanding who qualifies for this type of coverage is vital. 
  • Cost and Premiums: Explaining the cost structure, including premiums, helps clients make informed decisions. To learn more about the prices, click here. 
  • Benefits: Highlight the benefits such as the coverage duration, flexibility, and comprehensive coverage is essential. 

Benefits and Drawbacks of Extended Term Insurance

Any health insurance plan has benefits and drawbacks, so it’s essential to consider them all with your clients and determine if this is the right path forward for them. 

Benefits

The benefits of extended term insurance include but are not limited to comprehensive coverage, long-term security, and tailored policies. 

  • Comprehensive Coverage: Extended term insurance provides comprehensive healthcare coverage, including hospitalization, surgeries, doctor visits, prescription drugs, and preventative care. 
  • Long-Term Security: The long-term security allows policyholders to maintain peace of mind and financial stability, knowing they are covered for more time than traditional plans. 
  • Tailored Policies: Health insurance brokers can work closely with clients to tailor the extended term plan to their specific needs. This customization allows brokers to address individual health concerns, preferences, and budget constraints. Plus, if using our eDIYBS platform, you can get 12 plans with 4 pricing tiers in just 2 minutes, providing the widest breadth of coverage options to clients. 
  • Enhanced Client Retention: Offering this type of insurance plan can improve a health insurance broker’s or TPA client retention. When clients find health insurance professionals who can provide long-term solutions and adapt their coverage as needs change, they are more likely to remain loyal and even refer services. 
  • Diversification of Services: Incorporating extended term insurance into your portfolio diversifies your service offerings and positions you as a comprehensive insurance provider, attracting a broader clientele and increasing revenue opportunities. 

To learn more about the benefits of this insurance plan and Health In Tech’s plan, click here

Drawbacks

Despite the numerous benefits, there are some drawbacks, which consist of: 

  • Higher Premiums: Extended term coverage comes with longer coverage periods and higher premiums. When presenting this plan option to clients, brokers need to be transparent about the cost implications. 
  • Limited Short-Term Coverage: This plan is unsuitable for all clients, so it’s best to identify client needs and advise them on alternative options if short-term coverage interests them. 
  • Eligibility Challenges: Not all clients qualify for this coverage due to factors such as age, pre-existing health conditions, or occupation-specific criteria. 
  • Complexity in Policy Selection: These plans can also be more complex than traditional health insurance plans, so it’s crucial to invest time in educating clients on the nuances of the policies to ensure they are making a well-informed decision. 
  • Market Competition: As extended term insurance gains popularity, the market may become more competitive. Staying informed about industry trends and continuously improving knowledge will be essential to maintain a competitive edge. 

Extended Term Eligibility 

As noted above, only some qualify for extended term insurance. Several factors must be taken into consideration. 

Age Restrictions

Typically, there are no age restrictions on this insurance plan. However, policyholders must meet certain age criteria to qualify for coverage. For instance, 

Health History

Clients with pre-existing medical conditions or a history of serious illnesses may face challenges when seeking this type of coverage. 

Occupation-Specific Factors

Certain high-risk occupations might require additional underwriting or result in higher premiums. 

Financial Stability

Clients may need to provide proof of income or financial records to demonstrate their ability to afford the higher premiums. 

Extended Term Enrollment

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When it comes to enrollment, it’s not only important to choose the right policy for a client’s healthcare needs, budget, and eligibility, but health insurance professionals also must alert clients of the premium payment options such as monthly, quarterly, or annually as well as the waiting period before certain benefits become effective. Clear communication is essential to ensure they understand their coverage. 

Once the application is submitted, the underwriting process begins. Brokers should maintain open communication with clients during this period and provide any requested information. For expert tips and tricks on how to best translate insurance contracts to clients, click here. 

By guiding clients through the eligibility and enrollment processes, you can help them secure the right plan tailored to their circumstances and provide them with long-term healthcare protection. 

Let Health In Tech Handle Your Extended Term Insurance

Extended term insurance is a valuable tool for brokers and TPAs. By understanding its intricacies, benefits, and drawbacks, you can offer long-term, comprehensive solutions to clients. To learn more about this insurance type or to partner with Health In Tech to provide your clients with the best possible package, contact us today to get started. 

To learn more about self-funded healthcare plans, Health In Tech’s various ancillary product plans, the future of the industry, and more, check out our resources page. 

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