Methods for Pricing Medigap Policies

Insurance companies have three different ways of pricing Medigap policies.

No-Age-Rated Policies

These policies (also called community-rated policies) charge everyone the same rate no matter how old they are. In general, no-age-rated policies are the least expensive over a lifetime.

Issue-Age-Rated Policies

The monthly premium for these policies is based on your age when you purchase the policy. The cost does not automatically increase as you get older. The premium will be the same for anyone buying a policy for the first time at a particular age.

Attained-Age-Rated Policies

The monthly premium for these policies is based on your age each year. These policies generally cost less at age 65, but the costs go up automatically as you get older.

Marvin says, "I think we have enough information to buy a Medigap policy."

The agent responds, "The best time to buy a Medigap policy is during the Open Enrollment Period. Let's discuss this next."

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Last Updated 11/02/2004