With constant media attention on gaps in health care coverage and the financial strain caused by major illnesses and accidents, you might take it for granted that human resources professionals and business owners understand the need for voluntary insurance benefits. But many do not. Distracted by other concerns, they are likely to raise objections that you may need to overcome quickly.
It helps if you are prepared with answers when you sit down to talk about the voluntary insurance benefits you offer them.
We recently surveyed a group of successful worksite agents to identify key objections and the answers they found to be most helpful in selling a case. Perhaps these responses might be helpful to you, the next time you face a challenging sales interview.
Objection no. 1: “I don’t want to get involved in selecting coverage levels, and I can’t afford to have our limited staff administer a voluntary program on top of everything else.”
Your response: I understand your concerns. With group products, employers need to play an active role in selecting and administering each plan. This includes selecting the products to be offered, setting up payroll deduction and paying premiums to the insurance company. It also includes administering the plan, which involves enrolling new hires, certifying eligibility for claims and maintaining billings.
However, with individual voluntary products, employers have few responsibilities. Their primary role is to provide access to employees during lunchtime or breaks so they can learn about the additional coverage options, and elect to enroll. You may also choose to set up payroll deduction of premiums, but that is not always required. For example, your employees can authorize a deduction of a premium directly from a personal bank account, otherwise referred to as “employee non-payroll.”
Objection no. 2: “Some of our employees are in bad health and won’t qualify for coverage.”
Your response: Yes, with individually underwritten products, employees who have serious health issues may be excluded from coverage. But, that is even more reason to begin offering the products now. Don’t wait until the next open enrollment. We don’t want someone else to fail to qualify because we waited 30 days.
Another alternative is to use group-underwritten products, which typically are offered on a guaranteed-issue basis, covering all employees, including those with underlying health conditions. GI is attractive to employers wanting to ensure that all employees are eligible for some level of coverage. Typically, minimum participation is required for GI coverage. The standard level is 20% to 25% of the eligible population, depending on the size of the employer. Voluntary group products often used to complement core benefits include short-term disability, critical illness, and universal life.
Objection no. 3: “I want to survey my employees first to see if they are interested.”
Your response: I can understand your point. But what do you do when someone calls you on the phone asking you to buy something? In my experience, the response is almost always no. Instead, let me help communicate to your employees how you are enhancing your benefits package with a new offering.
Objection no. 4: “We have employees across multiple states, which makes it hard to offer the same benefit to all employees and to administer different policies.”
Your response: The good news is that group policies are issued to the employer in the state (known as the “situs”) where the employer is located. Each employee is issued a policy certificate in the situs state. Regardless of where employees are located, they are all subject to the same benefits, rates and underwriting. This enables you to be in control of the benefit levels and simplifies administration of the program.
Objection no. 5: “Our employees already pay a lot for medical coverage. They won’t want to pay anything more.”
Your response: Your employees are like many others. They face rising costs for medical coverage, lower coverage levels and higher deductibles and copays. Many employers, however, include voluntary products in their benefit programs as an economical way to help employees fill these gaps. They also help them offset non-medical expenses, such as caregiver fees, lost wages, and travel to treatment facilities. We have a couple of practical options for offering voluntary benefits at a price your employees can afford.
Premiums are usually lower for group products compared to individual policies because risk is spread among the group of employees enrolling simultaneously. Rates are based on the entire group, not just one individual. For example, rates for disability products are age-banded and based on the plan design and the group’s industry. Therefore, all 40-year-olds would pay the same rate for the same coverage.
However, with group products, the benefit amounts often are lower with fewer choices. In contrast, individual products allow each employee to select a coverage level to meet his or her needs and budget. Employees can select either the preferred level of coverage or back into a benefit level by specifying the premium they wish to pay. And they typically have several underwriting bands–such as a preferred plus, preferred or standard–which offer lower premiums for healthier employees and those that don’t use tobacco. Some individual products also offer a return-of-premium feature that allows policyholders to receive a refund for all the premiums they’ve paid, minus any claims.
Closing the sale
As a producer, you have many options for helping your clients build a strong voluntary benefits program that complements employer-paid benefits–at little to no cost to your client. Overcoming objections is a natural part of the sales process. Fortunately, with today’s product options and a flexible approach to enrollment, you should be able overcome most objections and help your clients provide the coverage their employees need.
Lonnie Graul is vice president for accident & health product management and Bill Breshears is director of worksite underwriting for Conseco Insurance Group, Carmel, Ind. They can be reached be e-mail at William_Breshears@Conseco.com and Lonnie_Graul@Conseco.com, respectively.