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Would a supplemental line pay for your plan?

A 43% loss ratio looks like a 57% margin until commissions, admin, premium tax and the cost of standing the product up come out. Enter your member base and assumptions; get the margin, the break-even take-up rate and three stress tests. Example values are illustrative — replace them with your own.

Product

Line and segment

Changing the line reloads the NAIC benchmark premium and loss ratio below.

Reach

Eligible members or employees

People you can actually offer it to: your own members, or employees at employer groups you already serve.

Take-up rate

Share of eligible people who buy and keep a policy through the year.

Price and claims

Monthly premium per policy

Expected loss ratio

Incurred claims plus reserve change, as a share of premium.

Cost to sell and run

Commissions and distribution

Broker or enrollment-firm commission, as a share of premium. Lower if you offer it directly to your own members.

Variable administration

Billing, claims handling, member service, as a share of premium.

Premium tax and fees

Varies by state; check your filing states.

Fixed annual cost

Product team, form filings, systems, marketing, compliance — spread per year.

Supplemental Health Market Explorer →See who writes each line today, their loss ratios and how concentrated the market is. Read the note →Why don't more commercial health plans sell hospital indemnity?

Method and limits

One steady-state year. Policies in force = eligible × take-up. Premium = policies × monthly premium × 12. Claims, commissions, administration and premium tax are shares of premium; fixed cost is subtracted once.
Break-even = fixed cost ÷ contribution per policy, where contribution = annual premium × (1 − loss ratio − commissions − administration − tax).
Stress tests. Adverse selection: loss ratio +10 points. Weak enrollment: take-up halved. Broker-led distribution: commissions +10 points.
Result bands (directional, not a pricing standard): Build the business case when the base margin is at least 5% of premium and every stress test stays at or above zero; Pilot first when the base case is positive but a stress test goes negative; Not on these numbers when the base case loses money.
Benchmarks are 2024 NAIC segment figures. Premium per policy = segment premium ÷ policies or certificates of listed groups. The loss-ratio range covers carriers with at least $10M of premium. Hospital indemnity has no NAIC group segment; group critical illness and accident premiums per certificate are not comparable with individual policies.
Not modeled: first-year acquisition costs and lapse, reserves and capital, reinsurance, investment income, state-specific form and rate filing timelines, and the excepted-benefit rules a fixed indemnity product has to meet to stay outside major-medical regulation.

Sources

Want this on your own membership data?

We size take-up and expected claims from your eligibility and claims history, so the first filing rests on your members rather than market averages.

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