Why should you consider cross selling voluntary benefits to your commercial lines clients?
Health care reform and the implementation of the Affordable Care Act (ACA), better known as Obamacare, is still rocking small business owners and the impact is rolling down hill to their employees.
And, those costs being passed down to employees are now driving the demand for more voluntary benefit products to deal with rising deductibles and out of pocket exposures.
Your clients are buying these from someone and right now it?s likely not you. ?
Facts for Cross Selling Commercial Clients Voluntary Benefits
While these once-in-a-generation changes are affecting businesses in a big way, most businesses and their employees have little idea of how much the earth is moving below their feet.
Consider these facts below from the AFLAC Work Forces Report.
- 79% of employees have no idea how healthcare will affect their lives
- 60% of businesses do not understand healthcare reform
- 45% of companies surveyed intend to increase their reliance on broker when making changes to their benefits plans.
This screams opportunity.
Cross Selling Voluntary Benefits
Voluntary benefits and P&C agencies are a hand-in-glove fit with your existing business.
You already have an established book of business and have knocked down most of the hurdles in developing a strong relationship with clients who know and trust you. While there is a long list of voluntary benefits products available, there are two core products we recommend.
- Hospital Indemnity
We also like term life insurance and disability (income protection) in certain situations, but accident and hospital indemnity are two of the easiest places to start.
Other Voluntary Benefits
Aside from the common accident plans and hospital indemnity, there are other voluntary benefits that may make sense to offer your clients.
- Critical Illness (CI)
- Hybrid CI and Chronic Conditions
- Identity Theft and Legal
Which accounts you should be cross selling.
A good first step in evaluating which of your commercial lines clients to approach would be by starting with those you have sold workers comp.
It is proven that companies offering voluntary benefits accident plans to their employees reduce their work comp claims which in turn saves money.
Think about it, how many of your commercial clients would be upset if you showed them a way to save money without spending a penny?
The second set of accounts I would focus on would be those offering high deductible health plans. The hospital indemnity plan is a great way to offset the high deductible and makes employees more comfortable with their benefit package.
Not only are you helping your client, but you are directly attacking the exposures employees have on their health plans. Your clients? employees will see their employers as heroes.
Get Started Cross Selling Voluntary Benefits
The elephant in the room for voluntary benefits is the enrollment process.
More mistakes are made here than at any point.
We suggest you work with a local enrollment company with proven experience. Yes you?ll take a small commission cut, but a good enrollment team will make you look like a hero.
Your focus should be to leverage your client relationship and let the enrollment experts do the heavy lifting to get the program started.
How Voluntary Benefits Enrollment Companies Work
Voluntary benefits enrollment companies follow three simple steps.
- Go to your client?s office.
- Meet with each of the eligible employees.
- Complete the enrollment.
This of course is when you don?t want to do the selling yourself. Otherwise, you are welcome to go out and enroll all your accounts yourself. Either way works.
It?s a win-win: you get to add value for your clients and generate a new revenue stream, all while staying focused on your core business!
The difference between those who succeed in today?s health insurance environment and those that do not is their ability to adapt.
Finding an voluntary benefits enrollment company
There are two common ways to find a voluntary benefits enrollment company.
Use an insurance company enrollment team.
Enrollment companies are usually divisions of the actual insurance company. For example, Colonial Life is one of the biggest voluntary benefits companies and has an embedded enrollment team. As long as you?re offering at least one of their products, you can utilize their enrollment team.
Hire a private enrollment agent.
Using a private enrollment agent is a popular choice for P&C agencies. You can find an enrollment agent that will work off a commission split or a fixed hourly rate.
We have two agents that have been working as enrollment agents for a few years we can introduce to you. One of them works for a commission split and the other will work for commission or a fixed hourly rate.
Voluntary Benefits Commissions
Commissions for voluntary benefits sales can vary based on product type.
Most street level broker contracts paid directly by the insurance company are going to range from 35%-50% with a year two and beyond renewal anywhere from 4%-7%.
This means if you wrote voluntary benefits on your commercial clients and the total employee account across all your enrollments was 250, you could expect to earn between $43,000 and $62,000 in extra revenue this year. This is assuming an average premium of $500 for each employee.
Not so bad when you think about how many clients you have sitting in your file cabinet.
Successful P&C agencies are adapting to the changing face of health insurance and taking advantage of this ripe cross selling opportunity to better serve their clientele.
They are evolving and finding smart solutions to help clients fill the gaps in their coverage created because of the rapid changes in the industry.
There?s no reason why you can?t join in the fun because if you?re not talking with your clients about voluntary benefits, someone else will. ?
If you would like to learn more about getting started with voluntary benefits or want more information about enrollment companies, please call us today at 866-547-8780 and our team will happily help you.