In this article I will be talking with some of my friends in the business, the Medicare Millennials Ethan Glidewell and Kenny Lammons, to talk about how Medicare is a lucrative business.
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About Kenny And Ethan Of Medicare Millennials
DD (David Duford): Thanks for being here guys. If my audience hasn’t seen any of your work on YouTube, Kenny and Ethan, why don’t you tell us a little bit about yourselves and then we’ll jump right in.
If you can’t tell by the name, we take a lot of pride in being young agents. We think that’s a big need in this industry right now.
We’re here in the Dallas-Fort Worth area and all very, very focused on Medicare, although we do some other things as well. Ethan.
EG (Ethan Glidewell): Of course, we’re in the DFW market. Like Kenny said, we’ve been attacking Medicare for a short amount of time, but we feel like we’ve found the secret here. And we’re trying to just share that and get that news out to everybody. Spread the good word.
DD: I think it’d be useful to explain your background, because Medicare’s not the first product in the insurance business you’ve sold. You’ve worked your way into this.
And I think, it probably leads you to have a unique perspective on answering the question if selling Medicare is a lucrative business or not. So briefly describe how you got to this point where your focus and specialty is Medicare.
Getting Into Medicare Sales
EG: So we’ve been doing Medicare policies, and Kenny and I have worked together for four and a half years. He’s actually the guy that’s got me into the business. He roped me in, I can’t get out now.
The agency we’d worked at prior to this, they were all exclusively selling Medicare Supplements and they almost painted it or brainwashed to saying Medicare Advantage is bad, it’s ugly, it’s not attractive, there’s no money to be made there. So essentially we just stay away.
And we carried that all the way over to our organization that we started two years ago. Long story short, we just continued going to Medicare Supplements. And we had walked by every single Medicare Advantage plan, which here in DFW there are lot.
And then one day, Kenny and I got to kind of just talking and we wanted to expand. We knew we wanted to do one more thing to add to our portfolio. We just couldn’t quite decide whether it was going to be annuities or whatever it may have been.
Discovering Medicare Advantage
We have a pretty good friend in the business who was doing Medicare Advantage and had been doing it for a couple of years.
And after several talks and discussions and conferences with this guy, he eventually twisted my arm. And it turned into me twisting Kenny’s arm and we got into it.
October of 2019 was our first AEP (Annual Election Period). So we’ve been into it, what is that? Nine months now?
We had a pretty successful AEP, I would say, but during an OEP, Kenny found you guys and it really took our knowledge of Medicare from here to here and really showed us the way and the secrets to actually write Medicare business all year long.
That’s when Kenny and I decided we can do this. We absolutely can do this. And so what we’ve done is we’ve just really shifted our focus. I won’t say a hundred percent Medicare. We still sell Final Expense and things like that, but we have really shifted our focus to Medicare and Medicare Advantage as well.
Why Is Selling Medicare A Lucrative Business?
DD: Kenny, maybe you can pop in here and answer this question for us. So if you can picture my audience, most probably are familiar with Medicare, maybe they’re even thinking about selling Medicare, maybe they sell Final Expense like you guys focused on as your primary product at one point. Maybe it was just brand new. Describe to us what makes selling Medicare a lucrative business to be involved in.
KL: There’s a lot of different angles to hit that question. But you mean in the context of relative to just selling Final Expense?
DD: Yes. Sure. I think that would be fair. Absolutely.
Long Term Opportunity
KL: I think it really goes from like a long-term mindset versus a short-term cashflow needs thing. And this is an important conversation to have with yourself or any business partners you have when you maybe make the leap.
Nothing can replace that quick cash flow, consistent, upfront money from Final Expense. So we continue to incorporate Final Expense for that reason.
But when you look at one year, three years, five years down the road, do you want to continue to sell 20 cars a month to make your money, or would you like to know that the effort that you put in, as long as you service those clients, is going to continue to pay you?
So that was one thing that made it attractive to us, but I want to make that really tangible for anybody listening to this. We look at everything in two blocks.
Blocks of 50 Medicare clients and blocks of 500. And just the rough renewal math on a block of 50 new Medicare clients is a little over a thousand dollars a month of renewals, okay?
DD: For life?
Medicare Advantage Pays Lifetime Renewals
KL: For life. So as long as you sell to Sam, or they don’t pass away, right? You have a little bit of attrition, but you can mitigate most attrition. And for every block of 500, it’s over $10,000 a month of renewal income.
Well, we try to sell between 30 and 50 Medicare plans per month each. And already in the first nine months, we have around close to 300 Medicare clients each already.
So just look at it from a block of 50. I mean it’s powerful, right? To think if I just get 50 customers, then starting the January of the following year, I can count on over a thousand dollars a month in comp and just grow from there. Do 50, then another 50 and another 50 and another 50.
So from a broad level, that’s something that was really attractive to me when it was explained to me that way. And you don’t have to quit selling Final Expense. It’s ironically the exact same market that you’re already working.
You don’t even have to change your marketing to Medicare Advantage leads. We do, but there are plenty of successful Medicare agents that go in on final expense leads. So I hope that kind of opens the door to that conversation.
DD: Yeah. So the money’s definitely there. And the great thing about Medicare is it’s not today money, it’s tomorrow money. I’d like you guys maybe to expand on that.
I mean, the nature of Final Expense, great product, but here today, none tomorrow, right? It’s the first year driven product, a little bit of renewal, but the Medicare products bring in a lifetime renewal.
When we say selling Medicare is lucrative, we think about the money that we earn, right? And the kind of money you can earn is significant. Ethan, you can pop in and tell them what you think.
What’s the talk about what this type of business model long-term affords you, not just in income, but in lifestyle. Do you have any thoughts on that?
EG: Well, just like Kenny had mentioned, if you can get 500 Medicare clients, you’re sitting at over a hundred thousand dollars a year before you do anything, before you write a single other piece of business.
Less Stress Wondering Where Tomorrow’s Money Is Coming From
So obviously with the hundred thousand dollars coming in, you can pay for your leads, you can take time off, maybe the stress will ease, everybody knows what commission breath is. Maybe rent’s close and you’re just a little bit short on cash for rent, you don’t have to worry about that anymore.
I think I’ve talked about this several times, my lifestyle. I mean, Dave, I texted you two months ago, “Hey, I’m right down the road from you, yada, yada.” I like to travel. And honestly, what I eventually like to do is get to a point where I can work AEP and OEP. So those six months, and then the other six months I’m gone.
So as far as the freedom and the flexibility, that’s why it’s attractive to me. Obviously the money is great and helping clients out and things like that. But being able to not have to worry about that. If I wanted to take a week off or we got a buddy in town, whatever it may be, we can go do that and it doesn’t hurt the checkbook.
Less Hustle Long-Term
KL: In my opinion, and I’ve done a lot of both Final Expense and Medicare, you actually can accomplish your goals, in my opinion, with a little less grind. Absolutely unnecessary to work like those crazy hours a lot of Final Expense and even Medicare agents will do from 9:00 AM to 10:00 PM.
I’m not dogging anyone that has that work ethic. Maybe they want to sell 2000 policies their first year, by all means. But to do just the pace that we’re doing, which is a pretty good lick, we’re actually working less than we were when we were trying to accomplish comparable goals for Final Expense.
So longterm, it gives you freedom. But in my opinion, if done right, short-term it gives you more time away from work. You’ve got a little bit more service work, but that can be done remotely.
And it’s very manageable. But as far as just the actual boots on the ground work, I believe, in my opinion, it doesn’t take as much time and grind for what that’s worth.
The Medicare Market Is HUGE!
DD: I know you guys are experiencing this. It’s nice making money when you work for it, but you’re still enjoying the fruits of the labor that you put in a long time ago. It’s like how it is in building an agency. You have other selling for you and it’s kind of cool.
So Kenny, speak more on the kind of demographics and the shifts going on in society right now as it relates to the baby boomers. I think this is a really vital element to consider.
Whenever you’re looking at any business line, what are the underlying fundamentals that support or withdraw any sort of interest in the market and make selling Medicare lucrative or not. So can you kind of speak on that?
10,000+ New Medicare Recipients Daily
KL: I love this conversation. And I don’t know the exact data by memory, but I know roughly speaking, what you’ll hear about this industry is that there are 10,000 people aging into Medicare every single day. So there’s just a massive amount of baby boomers and will continue to be for the next 10 plus years aging into Medicare.
So at the same time as you’ve got an almost unprecedented amount of people getting onto Medicare, you’ve also got a mass exodus of insurance agents leaving the industry. And that’s why we just really love to kind of shout out to the young people this opportunity.
An Exodus Of Agents
If you’re living in your mom’s basement and can’t pay off your student loans, there are jobs out there. Here’s an opportunity. The average age of an insurance agent, particularly in the senior market, is in the late 50s or close to 60 years old. And every single day, people I know in the industry are racking it up and calling it quits.
DD: Think about it. When you’re 58 and after doing all this work for decades, do you think you’re going to work till you’re 70 or 80?
KL: No way.
DD: Nobody gets in this business … well, I’m sure there’s a few, but I’m not doing this so I can drop dead of a stroke beating the streets for clients at 75. I’m doing this so when I do get to 50, I can take the foot off the gas and enjoy myself a little bit more.
KL: Yes. So the overall business model, is there enough market space there? What would make somebody who’s looking for a good opportunity be drawn to this opportunity? Those numbers out there alone should kind of paint the picture. There’s a lot of people, there’s a big demand and we don’t have quite enough supply. And every year we’re losing more and more agents.
EG: Yeah. And Kenny not only the 10,000 a month or a day or whatever it is that they’re turning. I mean, think about the millions that are already there. There’s so many people.
KL: And it’s not just 65 and older. Ethan and I sell a lot of clients, Final Expense, market clients that are young … I have a Medicare Advantage client in their 20s.
There are a lot of people on disability Medicare. And they need Medicare plans just as bad as somebody 65 and older. So there’s a huge existing base as well.
A Fundamentally Strong Market For Decades To Come
DD: I’d like to throw a couple of stats out there for the audience to consider too. I think you guys have made the sales pitch and it’s clear that there’s huge opportunity, but to me it just gets even better.
50% Increase In Medicare Recipients From 2020 to 2040
So number one, from 2020 to 2040, 25 million people will be added to the register of people who are 65 and older. So there’s approximately 50 million right now. In 20 more years, it’s going to be 75 million approximately.
Like you said, the second stat you guys mentioned, the average insurance agent is getting close to retirement, he or she is leaving the business in droves.
Less Agents To Handle Increasing Number Of Prospects
And if you look at the attrition rate agents failing out of the business, quitting out of the business and versus the ones that are coming in on top of the number of prospects coming in, it cannot keep up at the same ratio.
So in other words, there are more prospects, but then there are less agents to handle them. That’s the perfect setup for a business, if you ask me. And this is fundamentally true, not just today in 2020, but for the next 20 years, if not longer. So if you’re looking for a career, lots of opportunities there.
Social Security & Medicare Are “Political Third Rails.”
And then I think this is important too. If you go out and try to change Medicare or reduce benefits, you will have millions of seniors go to the voting register and vote the bonds out, Republican or Democrat.
You have to understand this. A senior who’s getting Medicare has paid into the system for decades. Okay? It is their right. That is how they feel about it. They have earned the right to access it at that point.
And there are so many, again with this growing block of business, that if it gets toyed with, you risk losing your job as a politician. And all politicians want to keep the gravy train going. So why would they do that?
So I think from the standpoint of political protection, you’re not going to see that. Just think of what’s happening right now with the economy, guys. I mean so much is going on.
How The Covid-19 Crisis Impacted Medicare Sales
We’re right in the middle of COVID-19. And have you guys seen a reduction in insurance sales due to coronavirus? Which is a good point to bring up. I mean, have you guys seen a reduction in interest or business when it comes to Medicare?
EG: No, I don’t think so. We were doing phone sales during the height of everything. We have gone back to face-to-face. This is my second week out. And what I’ve seen, at least, and Kenny, you can probably add on to this. But what I’ve seen is these people are excited to see somebody. They’re excited to have somebody get to the house and explain something to them.
But no. We haven’t slowed down any. In fact, I feel confident that we’re getting more appointments booked right now. We’re seeing more people, less no shows. I don’t think I’ve had a single no show. Maybe one in two weeks, which is as you know in the insurance industry, typically high. So, I think it’s been great.
Macros Problems Economically Have Little Impact
KL: You make a great point, Dave, when you talk about just the kind of macro level protection, that you can feel a little bit of confidence that unless the whole world turns upside down, which this year maybe we’re as close to it as you can be.
But you can feel confident that the Medicare market is going to be there, right? Like from a political standpoint. The rug is not going to get pulled out from under you. Definitely not easily and not overnight.
But from a micro level, what makes Medicare along those same lines like a necessity at a macro level. On a micro level it’s such a complicated … what would you call it? System.
Medicare is straightforward maybe to us as an agent who has learned it, but to just your everyday layman that’s out there, they qualify for Medicare. They don’t know where to begin.
A Relationship-Driven Sales Model
So it’s much less sales-oriented, like maybe a Final Expense product or a prepaid burial. It’s very much less about the product, and it’s much more about the relation in an advisory type sale.
What I like about that is you’re almost indispensable to that client, right? So with Final Expense, these seniors need that product. However, it is still in some ways, discretionary based on their view of who’s going to take care of it after they pass.
With Medicare, maybe one in a thousand would tell you it’s discretionary and they’re not interested in having Medicare. They have no choice but to, number one, use it, because at that age almost everyone’s got to use it weekly, monthly.
But number two, they don’t even know which direction to go. So I think that should be attractive to agents that want to feel like they are … I guess, the best way to say it, they’re needed.
You know what I mean? There is no substitute for the advice and the guidance that you give to these people, which makes it a much more relational type sale and a relational business model.
Will Agents Get Eliminated By Artificial Intelligence Or An Amazon-Like Entity?
DD: And that’s a good point to bring up. It’s 2020. Amazon has destroyed the mom and pop retailer, Walmart did too before that. Are you concerned at all with a risk of say AI, or some big name coming into the business and gobbling up market share and making your job harder? What do you think about the future of insurance agents?
EG: No. For life insurance, you’ve got the Policy Genius. There are guys out there that’s rely on automation. I know that with Medicare they’ve got call centers. That’s one of the questions I asked there in my needs assessment, is how did you get this? And where, and when? Because I want to know.
Sure you’re always going to have those people. If they do automate it somehow where they can click a button and it’s taken care of next day, or whatever, sure. You’re always going to have those people who think they’re avoiding getting sold or whatever it may be. You’re always going to have those people in whatever industry.
Medicare Clients Prefer Human Assistance
But no, at the end of the day, these people, especially the ones over 65, they don’t want to depend on technology. They don’t want to make a mistake. They understand it’s their health insurance. And one mistake could cost them hundreds of thousands of dollars.
So, no, I don’t believe that. I’m not nervous at least that anybody’s going to come in here and develop some sort of technology that’s really just going to take it all away from us.
I believe they’re going to want that personalization, and what Kenny had said earlier, the relationship. They want to know at the end of the day that they’re being taken care of, that they’ve made the best choice.
KL: And to add to that, there is always going to be a certain segment of the population that just buys something over the phone, and that’s fine, right?
Like there’s always been that and there will continue to be that. And maybe it will even grow as seniors become a little bit more adept to Facebook, cell phones, technology.
Face To Face Will Always Exist Despite New Technology
There’s always going to be that. And I’m sure that the technology market will grow in the senior market, but so will the need for face-to-face agents, because for every person that’s willing to just buy something over the phone, there’s another person that says, “I don’t understand what you’re talking about. Like I need to sit down with someone face-to-face and see this.”
And I’ll also throw something out there. I love these call centers. I mean, they’re practically giving me business. Not all of them, but many of these big call centers, they just pick one or two plans and they just throw it against the wall, tell them what’s beautiful about the plan.
So I’ll sit with somebody and they’ll go, “I got this plan and none of my doctors take it. And three of my drugs aren’t covered and I’m just in a mess.” And now not only am I able to help them, not only am I able to make some money, but I’m their savior, right?
And so listen, this stuff, I don’t want to scare anyone off, but it’s not something you’re going to learn overnight. You have to learn these plans. Depending where you live, your plans are a lot different in Texas than in California, than in Montana. And that’s not an obstacle.
That’s actually a benefit to the agent, because it makes you indispensable. A call center in Idaho is not going to have intricate knowledge of the networks and the needs and the nuances of your market. So you are now indispensable.
KL: Dave, there’s going to be more technology. That’s going to reach seniors, but just as quickly, the need for face-to-face agents will grow equally if not faster.
Medicare Sales Is Service-Driven
DD: Yeah. That’s what’s nice about this, ultimately this is a service driven line of business. Our clients are old enough to probably prefer that. And I think you can rely on it, because this is complex.
We take it for granted, our knowledge of insurance versus the common man. Many times, it’s just over their heads. And just somebody to take the complex and simplify it is pivotal.
A couple other things I think are worth mentioning, why selling Medicare is lucrative. Number one, how much premium does the client pay for your Medicare Advantage plans most of the time?
EG: Dependent, of course, on the plan, but a lot of times zero.
KL: And sometimes they actually get money back in their Social Security check if they signed up with their plan.
DD: Yeah, like you said, you’re a savior. Not technically, but by what you do, sometimes you free up money they otherwise didn’t have. And it’s not like selling a plan that has a premium attached to it.
It’s a zero premium technically, but it’s not like a final expense plan that is going to cost something out of pocket directly from a monthly premium basis.
Prospects Believe Buying Supplemental Medicare Coverage Is A Must
DD: The other thing I think is good too about Medicare is again, you all have to understand, if you don’t realize this, every single person turning 65 starts Medicare. Okay? And that is the pivotal age all insurance is a life event based purchase. Right? We buy insurance when we buy our new homes, get a new car, get married, get a career advancement. This happens at age 65 too.
And I don’t know if it’s millions or billions of dollars, but there’s a lot of money that is thrown to a senior that is turning 65 telling them that you have got to get a Medicare plan.
It’s optional, but a lot of people come into this with their wallets open, ready to buy, because they feel as if they should, because they’re constantly inundated with marketing suggesting that they should. And they probably shouldn’t most of the time.
But we leverage that, I would think, we’d all agree. Right? They see all this, it’s just assume that you’re going to get a Medicare plan. Whereas, the same amount of effort is not put into a life policy, how important it is.
Everybody should own life insurance, but you don’t see as much constant in your face as you would. So we kind of attach ourselves to that and play to that trend and that influence on the consumer.
KL: I really love the way that you kind of come from a position of power with Medicare. Because if you meet somebody that you know in your personal life, or like a referral that’s turning 65, they typically want a guy. A guy or gal, like somebody they can trust to do. You’re desired, you’re sought out.
And almost always, if somebody responds to a marketing piece for Medicare, it’s because something’s not working properly on their plan, like a drug’s not covered, or they do have a big premium on their Medicare plan or they can’t see the doctors they want.
And so, and I don’t want to sound in any way shrewd with this, but you almost come from a position of power like I’m the guy that can solve that problem for you.
And I don’t even have to expose the problem, you’re admitting to me right now, openly, you can acknowledge you have a problem. I’d love to help you solve that problem.
Whereas, we know with final expense, that same need of a problem exists, but it’s almost your job as a final expense agent to teach them that that problem exists, right?
It’s not that way with Medicare. And I like that. I like coming from the position of, “Do you want my help or not? Here I am.” Type of deal. So, for what that’s worth, that’s really cool.
Huge Referral Generating Opportunity With Medicare
DD: Ethan, Kenny, any last thoughts on why selling Medicare is a lucrative business? Anything we want to hit on. I mean we’ve covered a lot of basis.
I think it’s clear that there’s tons of opportunity in this business for the right agents. Is there anything glaring we haven’t hit on as far as what makes this business special?
EG: I think we’ve hit on most. I mean, I talk about this quite a bit as well. I know there’s some red tape as far as getting referrals in the Medicare business, but at least in my experience, maybe in my nearly five years of doing this, I’ve had one referral call me for Final Expense.
They’d said, “Hey, you sold somebody this a couple of months ago or whatever and I don’t want the same thing.” Just doesn’t happen. At least for me, I’m terrible at it maybe, whatever it may be, but I’m telling you, with Medicare, you take care of people.
Like Kenny said, you save somebody $100, $200 on a prescription drug that wasn’t covered, whatever it is, you know what’s coming. You know they’re going to tell people about that.
And the first time that their friend complains that their drug isn’t covered, who are they going to call? So, it’s just out there, guys. It’s exciting. I’m going to be doing it for a very long time. And I hope that this is helping you guys get off the fence and go to work.
KL: Yeah. Dave, thanks for having us on. We always love the way you lead the conversation. I think there’s a lot of gold here. Gold nuggets for people out there. And I will just throw out a little plug for us. Our channel is really nothing but us explaining why and how we’re doing this successfully.
So if you just want a little more deep dive on some of the things that we’re doing to be effective at selling Medicare, definitely check out our channel, Medicare Millennials.
DD: And I’m going to link your channel below. So if you guys haven’t subscribed already, please click that link, then hit the subscribe button and then you’ll get content. They put out a lot of content about Medicare. So if you like what you read today, there’s a lot more waiting for you.
Kenny and Ethan. Thank you for your time. I appreciate it.