Tapping Into The Executive Benefits Market

By Cecily Bishop

In recent years, the insurance business has been in the spotlight, sometimes in a negative light. Articles in the media, court cases and potential legislation have shaken our industry. But under the bright lamp of reality, individuals and businesses of all sizes know that our products play a necessary and important role.

One group in particular that needs our products, services and expertise is the owners and managers of small and medium-sized businesses. Business owners are dedicated to making their operation a success.

To that end, they need to recruit, retain and reward their key employees. This is not an easy task, and business leaders need guidance in identifying and offering the most appropriate benefit packages (qualified and nonqualified) to their key employees.

Key employees, in turn, need help planning and saving for their retirement years, obtaining adequate insurance coverage and providing for the possibility of long term care costs. Because of limitations on qualified plans, key employees are often prevented from participating in or receiving benefits from such plans at the same percentages as the rank-and-file and are, in effect, “penalized” because of their higher level of income.

Many financial representatives who have focused on the personal market find themselves wanting to expand their practice, enhance business with existing clients or find new ones. They also may be seeking work that is more exciting, intellectually challenging and enjoyable.

While many financial representatives have personal clients who are owners or managers of businesses that need help in this area, they often miss an important opportunity by not having a conversation about the benefit needs of the key employees. When talking to clients about personal needs or employee benefits such as disability insurance or 401(k), don’t leave business on the table by neglecting this topic. The client likely needs a nonqualified benefit plan, too.

The most enduring client relationships are typically founded on needs-based planning rather than product-focused sales. Uncovering all the needs of the client who owns or runs a business should be a primary goal.

This includes finding out what issues the client may have relative to compensating and providing benefits for key people. Discovering this need and articulating it to the employer is often the biggest challenge. Doing this in a first meeting and listing employees for whom the employer might want to do something special opens the door to providing one or more solutions.

While there are numerous questions to ask a business owner when doing a proper fact-finder, here are some of the basics:

o Is the business a corporation (S, C or professional), a sole proprietorship or partnership?