The Federal Communications Commission (FCC) has made it clear that the do-not-call registry will apply to the insurance industry and prevent producers from calling both cold prospects and referred leads that appear on it. In other words, your prospective client list could potentially shrink considerably—not exactly a recipe for success.
If you are an independent producer in search of a carrier to represent, you should think about three important factors: the product, claims handling and service.
How will you continue to have access to prospective clients and be able to approach them on a favorable basis? One possible strategy is to market voluntary benefits. You can use this market to open doors to other personal insurance products, or you may find it worth pursuing on its own merit. In either case, you will find two emerging trends that make the voluntary benefits market worth considering. First, employees are more open to purchasing insurance products through their employer. Second, employers are usually looking for ways to provide benefits to their employees at the lowest cost.
Here are a few issues to consider when deciding whether to pursue this market:
If you are an independent producer in search of a carrier to represent, you should think about three important factors: the product, claims handling and service. Ask the questions: Are the products guaranteed issue or modified guaranteed issue? Does the carrier pay claims promptly? Is the billing system accurate, efficient and flexible? Does the carrier have a toll-free number for questions? Other factors to consider include the cost of the product, the marketing materials, the administrative costs and the available training program. If you are a captive agent, then compare your company’s product to its competitors.
You must also consider if the profile of the voluntary benefits prospect is a good fit for you. A carrier should be able to provide specific information about the type of prospect for which its product is designed. In general, these products have been successful with employees in businesses with 50 to 500 employees who earn annual salaries between $25,000 and $75,000. Some of the more popular industries include manufacturing, local government and service organizations.
The selling process
The selling process for voluntary benefits, commonly referred to as worksite marketing, is more involved than selling personal insurance products. First of all, worksite marketing requires multiple sales presentations. For example, you first need to demonstrate to the business owner or executive that voluntary benefits can achieve desired business objectives. In addition, you will need to convince management to endorse the process and mandate their employees to attend enrollment meetings. Finally, you present the product to employees.
Second, the enrollment process means you must take multiple applications in a short period of time. If the product and situation call for a one-on-one consultation, you may need to outsource the application process to professional enrollment specialists. Even if the application can be completed in a large group setting, there is still the challenge of submitting and following up on a large number of individual applications at one time.
Third, voluntary benefits require more service. You must ensure the proper management of items such as monthly premium record maintenance, addition of new employees, billing changes for former employees and so forth. Although the servicing aspect can be outsourced, whether or not service is carried out properly is ultimately a reflection on you.
A final word
Although voluntary benefits are more involved, there are quality specialist firms that can free you up to focus on making the sale and building relationships. These relationships can give you access to qualified prospects who can be approached on a favorable basis for traditional individual products without running afoul of the FCC.
Kirk Okumura is an author and editor for The American College’s LUTC program. Contact him at kirk.okumura@TheAmericanCollege.edu.