While Medicare continues to face legislative uncertainty – which has us temporarily pausing Medicare acquisitions – there's a massive opportunity in ancillary products that every agent should be paying attention to.
Whether you're building your business, planning for eventual retirement, or somewhere in between, ancillary products offer unique advantages that are especially relevant right now. Here's why.
Your biggest asset isn't your Medicare book – it's the customer relationships you've built.
You can put a dollar value on policies and commissions, but it's hard to put a price tag on trust and loyalty. That's what you really have.
Here's the key question: how deep can you go with each customer?
Sometimes it's just Medicare – and that's okay. But a lot of times, you could go deeper with them. Maybe you're not confident selling other products, or you're too busy during AEP, or you just haven't thought about it.
But here's how we should think about it: Medicare is what gets the relationship going. Then once we have that relationship, how deep can we go?
That's where ancillary products come in.
Let's talk about what makes ancillary products so valuable – whether you're writing new business or thinking about what your book might be worth someday.
For the sake of this article, ancillary products include hospital indemnity plans, cancer insurance, short-term care, critical illness coverage, dental, vision, hearing, and other supplemental health products.
Medicare products require constant servicing – annual reviews, drug list changes, plan updates, rate increases.
Ancillary products? Much simpler. Once you write DVH or HIP business, the servicing requirements are minimal. You're building a foundation of renewal income that doesn't demand constant attention.
If you're still building your business, that means more income without proportionally more work.
If you're thinking about selling, it means lower servicing costs for buyers – which translates to higher valuations for you.
Access Capital – our acquisition partner – thinks about buying books of business like building an investment portfolio. Right now, they're heavy in Medicare products and want to diversify across product lines to hedge their investment.
The same principle applies to your business, whether you plan to sell it or not.
Relying solely on Medicare means you're vulnerable to commission cuts, regulatory changes, and market disruptions.
Every ancillary product you add creates another income stream that protects you from those risks.
Plus, if you do decide to sell someday, a diversified book is worth significantly more than a Medicare-only book. You're literally building equity with every policy you write.
Read more about how to increase your future valuations: 6 Practical Ways to Increase Value in Your Insurance Business
We're currently on a pause when it comes to buying Medicare books of business. It's no wonder, either – commission cuts and legislative uncertainty have us in this "wait and see" mode.
In addition, we don't typically buy any Medicare books of business during Q4 due to carrier blackouts.
But ancillary products don't have this major uncertainty or blackout periods. That means:
Right now, we're actively looking to buy ancillary books while the Medicare market is in wait-and-see mode.
Medicare is constantly changing. Commission structures get adjusted, plans get restructured, regulations shift. It's part of the business, but it creates uncertainty.
Ancillary products tend to have more stable commission structures and fewer regulatory disruptions. That predictability matters whether you're:
When you help clients with hospital indemnity, cancer coverage, and other supplemental products, you're not just their Medicare agent anymore. You're their trusted insurance advisor.
That loyalty translates to:
Think about it from your client's perspective. They're worried about final expenses, leaving money to their kids, protecting their retirement savings, and covering gaps in their health coverage.
If you're not offering solutions, they'll find another agent who will.
Read more: 15 Cross-Selling Strategies for Senior Market Insurance Agents
If you're only selling Medicare products, you're probably leaving significant revenue – and business value – on the table.
Consider Tim Bennett, an agent who's been in the business since 1986. For decades, he focused primarily on Medicare Supplements, occasionally selling some life insurance. Then one day, he started asking life insurance questions with an existing Medicare client.
The client casually mentioned, "Oh, well we bought 2 policies!"
As Tim recalls: "With that kind of premium, you're talking about a lot of money that you didn't make because you didn't ask. Needless to say, that was a long drive home thinking that I'd left $4,000 in commissions on the table."
Our most successful agents have books that include a healthy mix of Medicare and ancillary products. When it comes time to sell, those diverse books command higher multiples and attract more buyer interest.
But even if retirement is decades away, you're missing income opportunities right now.
Every Medicare client who sits across from you could potentially benefit from hospital indemnity, cancer insurance, or short-term care coverage.
Again, if you're not having those conversations, someone else will.
Get started here: The Ultimate Guide to Cross-Selling Insurance in the Senior Market
If you end up being too busy during AEP to have these conversations, Q1 and Q2 is the perfect time.
All those relationships you built during AEP are still warm. It's incredibly easy to go back to them with a simple approach. Here's what I'd say:
"I didn't have time to talk to you about this in the fall because I was so busy with the Medicare enrollment period, but I really need to talk to you about this. Here's what a lot of our customers are doing – you should really think about this."
It doesn't have to be complicated. Keep it simple!
For example, you could say:
"You know what, I have information about a hospital indemnity plan that a lot of my clients are adding. I'm just gonna send this to you. If you have questions, call me and I'll help you. But I just wanted to put it in front of you."
That's it. You're not hard-selling. You're providing information about something valuable.
As our annuity expert Kirk Sarff likes to say: "It ain't hard to milk a cow, it's just hard to do it every day."
If you make this a consistent habit – reaching back out to clients with these simple conversations – you will have amazing success and your confidence will grow. You just have to start asking.
It's okay if you were too busy during Q4. Get yourself lined up for January through the spring, where you'll go back to these people and tell them you should have talked to them about this sooner.
If you're focused on growing your current book of business: start incorporating ancillary products into your practice now. A lot of agents start with cancer insurance as it's affordable and it's a great supplemental policy for most seniors.
Not only will you make more money, diversify your income streams, and build better relationships, but you'll position yourself for a higher valuation down the road.
Most agents don't think about their book of business as an asset, but it is!
If you're thinking about retiring or a career change: Even if you're not ready to sell immediately, it's smart to know what your business is worth. Market conditions change, and understanding your valuation gives you options.
We're offering free, no-obligation discovery calls to discuss your book of business – especially if it includes ancillary products. During this call, we'll:
There's absolutely zero pressure. This is simply a conversation to help you make informed decisions about your business and your future.
Whether you're building your book or thinking about an eventual exit, ancillary products should be part of your strategy.
With Medicare acquisitions on pause due to legislative uncertainty, the focus has shifted to ancillary products – and that creates opportunity on both sides of the equation.
Remember: your biggest asset is the customer relationship. Medicare gets that relationship started. Ancillary products help you go deeper.
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