Become A Bona Fide Field Underwriter In Under 5 Minutes!
Traditional spec. and agg. schemes are more expensive than straight agg. only cover. So why isn’t everyone doing it?
“Employers of various size could expect lower total medical spending, on average, by purchasing aggregate-only stop-loss in place of traditional specific plus aggregate coverage. Groups of all sizes should consider aggregate-only coverage as a legitimate alternative to traditional specific plus aggregate coverage.” – Milliman Study
You know what your current spec. and agg. premium is. How does that compare to an agg. only stop loss policy? How can you estimate the cost?
Here’s a simple calculation on a small 85 life case:
12% (Expected Claims X 1.10) = Annual Agg. Premium
Expected claims = $680,000 X 1.10 = $748,000 X 12% = $93,600 Annual Premium or $91.77 PEPM
This calc. assumes a 10% corridor. A traditional spec. and agg. use a 25% corridor.
Agg. only stop loss cover coupled with certain Hot Potato risk transfer methods makes a whole lot of sense to the boys in the domino parlor.
You now know how to estimate agg. only premium. Congratulations, you have earned the title Field Underwriter!
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