Be Sure Of Suitability When Selling Workplace Benefits

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Throughout my many years in the voluntary benefits industry, Ive seen one issue arise time and time again: Too many of us are still trying to fit a square peg in a round hole. Why present a cancer product to an employee, for instance, when what he really needs is a disability product?

Selling the wrong product to an employee not only contributes to misunderstandings about how supplemental benefits work but could also damage your reputation as a producer and even that of the industry itself.

The overarching principle in assuring suitability in worksite benefits is always get to know your prospect. I typically employ a three-pronged approach. (See box.)

Before meeting with employees, consider using fact-finding and employee benefit surveys to learn about the company and what benefits already exist. This will help you uncover any voids in coverage, decide which carriers’ products can best supplement the existing plan and help you tailor your product offerings to the employers budget objectives.

Frequently, through the employer endorsement, you may also learn some important information about each employee, such as income, age, family size, occupation, length of time with the employer and perhaps even a probable retirement date.

All this information, plus facts you will learn from personal interviews, helps you select offerings from your portfolio that most closely satisfy each employee’s needs.

Its essential to show how the voluntary insurance product fits into the employees total financial picture. This not only helps the employee understand the suitability of his purchase but also shows him how to get access to the plans benefits if he needs to.

For example, when selling supplemental health insurance, point out that while the insurance generally pays benefits based on medical events, the employee does not have to use the benefit to pay for the medical event itself. This information is vital in helping your customer understand supplemental insurance as a valuable planning tool for families who use most of their paycheck, even during good times, for regular living expenses. Emphasize to the employee that supplemental insurance can help to pay added household expenses incurred during treatment of major illnesses, when income is often reduced because the employee or his spouse loses time at work.

From the point of view of suitability, making the appropriate insurance choices can depend upon many factorsage, income, occupation, family health history, budget and savings.

For example, a family living on a tight budget with little savings might be a more suitable candidate for accident insurance with sickness and disability benefits, as this policy would cover the immediate impact of a sudden illness or injury. However, a family with a higher disposable income may be better suited for a disability income policy with longer benefit periods and higher benefit amounts, because they are in a position to manage in the near term if theres an unexpected injury or illness.

Asking the right questions, then clearly informing the prospect what a policy is intended to do, allows you and the prospect to decide together which risk would pose the most immediate impact on the family, so both of you can find the most suitable insurance solution.

Picking the right carrier also makes a difference in meeting these needs. Ideally, the provider should offer a broad spectrum of market-sensitive products that work on both a group voluntary and individual chassis. That way, regardless of the employers size or preference, you will have a complementary offering. You will also want a carrier that can accommodate a variety of billing and enrollment methods.

In determining suitability, dont overlook the tools available from your carriers. Probably the most available yet underused tool is a comprehensive personal needs analysis guide, available from most carriers in one form or another.

It is important to take the time to evaluate information provided by your employee surveys to be sure you make the best insurance recommendations for each prospect. Recognize that in many instances, an employee or an employer may not be aware of a need until a voluntary insurance professional uncovers it.

Through it all, keep in mind that all employees within one organization may not have the same level of need. Each case is individual. Make sure you always remember to treat them that way.

, a field vice president for the workplace division of Allstate Corp., Northbrook, Ill., has been in the worksite marketing business for 17 years.


Reproduced from National Underwriter Edition, June 25, 2004. Copyright 2004 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.