Voluntary benefits: an afterthought or an opportunity?
By Brian Summers
Many brokers miss the opportunity to offer voluntary benefits to their clients because they view these benefits as an afterthought, rather than an opportunity. Whether the company is blue collar, gray collar or white collar, today's economy and political landscape have changed the way decision-makers approach their benefits package.
Voluntary remains one of the fastest growing businesses -- not just in the benefits spectrum, but in the insurance industry as a whole. Yet, many brokerages view voluntary benefits as a secondary segment to the benefit packages they offer. You think to yourself, "If a client asks me about voluntary benefits, then I will do something."
If you are not offering voluntary benefits to your clients, then I am here to tell you that someone else will. If you have not taken the time to find out what plans are offered and the additional services that voluntary carriers can offer you and your clients, then someone else will. As deductibles increase and the cost of core benefits are shifted to the employee, it is more important than ever that you offer your clients voluntary benefits.
Enrollment solutions, dependent verification/audit, core enrollment, benefits counseling and enrollment guides. These services, and many more, are available to you, the broker, to offer to your client at no cost, yet many brokers continue to pay for enrollment assistance! How many of you know that a large voluntary carrier is also one of the largest enrollment companies in the country? Would you want to work with an enrollment company that enrolled over $5 billion in core benefits in 2008?
How many times have you spoken to a client who asked for quotes in regards to disability insurance? You quote them an LTD policy with a 180-day elimination period and a "buy-up" option for disability. The client reviews the prices and just doesn't have the funds for this additional benefit. So what do you do? Do you offer them voluntary benefits or do you wait until the clients asks again and then provide them with another quote?
You meet with a client to review their yearly increase and benefit package. During the conversation they tell you that the company has experienced tough times and needs to cut costs. They tell you that they are considering cutting the company's salary continuation program to stem costs. How many of you would tell the client that you understand and have a solution for them. "Hey, Mr. Client, we can replace these employer paid plans with voluntary benefits. We will also have a representative speak with every one of your employees to explain why this change was made and they will print out a benefit statement on the spot showing your employee how much the company contributes to their benefits plan, and explain to the employee how much they are really worth."
In that one simple explanation, you have shown your client that you understand the challenges they are facing, shown them how they can offer a product to fill the gap that the elimination of salary continuation leaves, and have explained that you will have someone meet with every employee to explain why this move was necessary. Also, you are taking an additional step by providing benefit statements to every employee showing their true "salary." Do you think your client is happy with the services you provide or do you think this client will speak with another broker who may offer these same solutions?
How much do these services cost you or your agency? Nothing!
I have spoken with many brokers who have had a negative experience with voluntary benefits in the past. The rep was pushy, the rep didn't have the employee's best interest in mind, the compensation wasn't enough, the rep was new and didn't know the products.
First of all, shame on you for not finding out how the enrollment would be conducted. If the rep was pushy during your meeting, did you really expect they would be better with your client? Why didn't you confirm the compensation before the enrollment began? If the rep can't tell you exactly how much commission is paid on each product, then request another representative.
A voluntary enrollment should be about educating your client's employees. Educating them about why they should consider short term disability, accident insurance, critical illness insurance, life insurance, etc. Not every employee will want to purchase these plans, and the enroller should know this; however, we are all aware that there are many people who will choose to enroll in these programs, and unless they are given the opportunity to ask questions and feel comfortable about their decision, they may feel you are taking advantage of them.
If an employee makes $24,000 annually and is living paycheck-to-paycheck, it is imperative that the enroller explain why they may want to consider paying less than five dollars per week for a short term disability policy that will pay them if they become sick or injured.
If you are working with a voluntary rep now who you do not feel has the knowledge, experience or personality to work with your clients, then work with someone else. A simple request to the carrier is all that is required.
If you are considering offering voluntary benefits to your clients, then take the time to interview some voluntary reps. Make sure that the person you choose to work with fits the personality of your company and has your client's best interest in mind. Most importantly, choose a partner. Choose a partner who is flexible and provides a variety of options for the small account and the large account. Choose a partner who meets your company's standards and values.
In previous articles, I have written about what you should look for when choosing a partner. I hope you take the time to review these articles before you meet with a voluntary representative.
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