As you’re probably well aware, attracting new clients and pinpointing their needs can be challenging. To help you, Delta Dental recently explored the characteristics of people who buy individual dental plans.
PPO versus DHMO dental plans: What’s the difference?
A PPO plan, or fee-for-service plan, is a network-based plan in which enrollees can visit any licensed dentist, although they’ll save more by visiting an in-network dentist. These plans usually have annual deductibles and plan maximums.
A DHMO plan is a prepaid dental benefits product in which enrollees usually must visit their selected primary care general dentist to receive benefits. These plans have no annual deductibles or plan maximums — enrollees pay a fixed copayment amount for covered procedures.
Who buys individual dental insurance?
Anyone who has either had an employer-sponsored dental plan or bought an individual dental plan in the past is a potential client. Even clients who currently have individual dental insurance may be willing to change or update their coverage to get better rates or richer benefits.
DHMO buyers are more likely than PPO buyers to be switching from one individual dental plan to another. PPO buyers are usually transitioning to an individual plan from employer-based group dental coverage. Not surprisingly, the most common reason for this is because they retired from a job and lost their coverage.
What are some major drivers for dental insurance buyers?
Clients shopping for individual dental insurance obviously care about their dental health. That’s why for both PPO and DMHO buyers, having coverage for preventive care and being able to maintain the appearance of their teeth are the two most important factors in their decision to buy.
For PPO buyers, key factors include a dentist network that allows them to keep their current dentist. Consider suggesting plans that offer a large dentist network, which increases the likelihood that their dentist participates in the plan. PPO buyers also like to stick with what they know — we find that familiarity with a brand is an important factor in choosing a dental plan.
Among DHMO buyers, cost and value are more important. Key factors for purchase include low out-of-pocket costs, lowest price and the best coverage for the price.
Income may help you determine which products to consider for your clients. For clients with higher incomes, consider PPO plans, because we’ve found that these clients usually want the flexibility to see the dentist of their choice. Brand recognition is also important.
For clients who earn less, a DHMO plan may be a better option. Both cost and the ability to meet dental care needs are important to these clients, so knowing ahead of time how much a procedure will cost — and being able to plan and prioritize care accordingly — could be a plus.
For all clients, consider bundling offerings. Dental insurance buyers may also be interested in medical and vision insurance. However, they tend to be less interested in other types of insurance, such as life, disability, accident or pet insurance.
How do buyers like to shop?
According to a recent survey, the broker channel is a preferred method among American insurance buyers, with 43% selecting a broker or agent as a favorite option. That rate was higher among baby boomer and Generation X buyers, 61% of whom purchased insurance from a broker. Among millennials, 23% said they used an agent or broker to buy insurance.
The most popular shopping method overall was online, and most of the buyers surveyed said they used more than one channel to shop.
Among the most influential factors when shopping were an easy application process, followed by trust in the brand.
Is there anything else about buyers that I should be aware of?
Our research indicates that all buyers have a similar perception about value of dental insurance. They believe that dental insurance saves money on unexpected costs and makes visiting a dentist more affordable. Both direct PPO and DHMO buyers agree — dental insurance is a smart financial choice.