Be Creative In Identifying Group Life Prospects
By Alice Rathburn, Mark Sylvester and Marc Warrington
Life insurance is like money in the bank. Almost everybody has some. Almost nobody has enough. What you have, you probably got from your job. And that can be the most sensible and reliable place to go back for more.
In a nutshell, that is the essence of the life insurance situation for most working Americans, and it is the essence of a sound selling proposition for pitching voluntary group life insurance to employer prospects.
The situation is so pervasive that it is tempting to forget the idea of selectivity when it comes to identifying prospects for group life insurance. Chances are that the employees of a group insurance customer or a prospect already have some life insurance as an employee benefit, and chances are that this coverage is insufficient for the employees needs.
Still, some prospects are better than others. At the base, any case with 50 or more lives and a low employer-paid death benefit can qualify as a good prospect. Generally, a low death benefit would be a policy that is equal to the employees annual salary, up to $50,000.
Of course, the best place to find prospects can be an existing book of business. Its no secret that expanding business with a current customer is a lot more profitable and efficient than developing a new customer from scratch. Look for gaps in current portfolios. If a company has a low life benefit for employees and the employees have many dependents, for example, those employees are excellent prospects.
But what next? Here is one prospect-identification protocol to consider.
First, consider access. Agents or brokers who can get to employees should be able to get them to buy. Look at how the employees are spread out. If there are 150 employees in one building on one shift, youve got more efficient access than if there are 150 employees on two shifts at three different locations.
Next, approach companies that others may avoid, such as a company with a high percentage of female workers. Many women may see the workplace as an opportunity to purchase affordable life insurance coverage on themselves and their spouses.
Perhaps the couple has agreed that more coverage is necessary but have procrastinated on making the purchase. Best of all for the agent, since the employee must first buy group life insurance on herself before she can buy coverage on her spouse, the result is a prime opportunity for a double sale.
Next, look for growing companies. Despite the economy, there are companies that are growing. Scan local business media for positive news about companies that have discovered new markets, won new contracts and added new clients. Scan the classifieds and visit job fairs to see who is hiring.
Growing companies that need additional employees also need to put some extra effort into keeping their current workers. A great way to help recruit and retain employees is by sweetening the employee benefits pot.
Often, growing companies will want a broader package of benefits than just life insurance alone. Thats fine, because additional life insurance is a key component of a package designed to provide a comprehensive benefits solution.
Some employee benefit products even combine life, accidental death and dismemberment and long-term disability into a single product, with a single enrollment and single flat-rate payroll deduction. Such products meet both the employees need for income protection and the employers need for hassle-free administration.
Once the best prospects are identified, the real challenge begins. Overcome inherent employer skepticism with the following arguments:
1. Employees generally want and need additional life insurance.
2. Providing life insurance through the workplace can strengthen the companys bond with employees.
3. Administration of this voluntary benefit does not create an administrative hassle.
There is a wealth of statistical information supporting the “want and need” aspect.
As for enhancing the relationship, emphasize that employers demonstrate a caring, family-oriented attitude and a commitment to the welfare of their workers by making additional life insurance and other benefits available.
As for the hassle, take the prospect to an Internet demonstration site that shows how effortlessly a company can handle enrollment, management and even billing with just a few clicks and keystrokes.
Be prepared with answers to common objections:
“Im not sure my employees really want this.” Offer to conduct a free employee survey.
“I dont want to pull employees off the line for an enrollment pitch.” Provide pay envelope inserts or brochures.
“I dont have to do this. My employees are happy just to have a paycheck in this economy.” At a time when employees are being asked to do more with less in the workplace while salaries are stagnant, maintaining a comprehensive benefits package can help prevent the spread of bad attitudes that drain productivity.
Finally, fewer agents seem to be selling individual life policies, and there is a natural concern about buying life insurance this way because of the application process. The value of group life sold as a voluntary benefit is guaranteed issue. By offering voluntary group life, the employer is offering employees a financial protection proposition that they literally cannot get elsewhere.
Life insurance sold on the job is an incredibly underserved market. Voluntary benefits plans are an easy way for the employer to fill the benefits gap and cement a bond with employees without incurring significant additional costs.
Alice Rathburn is vice president at Fortis Benefits Insurance Co., Kansas City, Mo. She may be contacted at [email protected]. Mark Sylvester is Fortis Benefits vice president of sales responsible for the western United States. He may be contacted at [email protected]. Marc Warrington is Fortis Benefits vice president of sales responsible for the eastern United States. He may be contacted at [email protected].
Reproduced from National Underwriter Edition, May 12, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.