In response to The Perils of Speaking in Jargon
“There’s nothing wrong with using technical terms. In fact, if you don’t, you may end up on the wrong side of a compliance issue. The key is to use what every agent has been taught to use for the last 50 years — a bridge linking a fact or feature to a benefit. For instance: ‘The high carbon cast iron disc brakes improve thermal mechanical resisitance, WHICH MEANS TO YOU, MR. PROSPECT … you’ll stop this car on a dime — safely and effortlessly.’ OK, I got it. Great feature, great benefit. Right? Right! Let’s not complicate things or invent problems that are not there. Speaking in technical terms and linking features to benefits has been around since midway through the last century. Don’t be afraid to use terms like ‘cap,’ ‘participation rate,’ ‘mortality risk charges,’ or whatever. Your client needs to have some understanding of these terms. Just be sure he or she understands the associated product benefit.”
Colleen King wrote:
“Cost containment is key, along with increasing efficiencies in health care delivery and insurance carrier plan administration. And if you think government-run health care is the way to go, check out the story about how markedly the folks here in California underestimated the potential claim cost for the guaranteed issue Pre-existing Condition Insurance Plan (PCIP). Enrollment was lower than they expected, claim costs were much higher, so now they are looking at potentially capping enrollment into the plan. Can you imagine the mess once something like this goes national?
“There are other ways to improve the system, which certainly needs to be improved. And eliminating agents, some peoples’ goal, is not efficient. Creating another government agency to ‘place’ people in plans is not efficient. Agents don’t get paid unless they sell. We provide our own workspace, supplies and benefits. Can’t say the same for government agencies, can we!”
In response to “Lame” Industry Image Needs to be Debunked
Lew Nason wrote:
“As a branch manager for Met Life, from 1989 to 1993, I hired 23 brand new agents. Each of those agents started their careers by selling mortgage insurance (using whole life or universal life). Over 10 years later, 18 of those agents were still in this business, and they were all making well over $100,000 per year. Today, many of them are making $200,000, $300,000 and much more. Consider, according to LIMRA (Life Insurance Marketing and Research Association), the failure rate for new agents coming into this business is over 86% in the first 5 years. I was able to achieve an 80% success rate. And, they have incomes that are double and triple the industry averages! The problem in our industry is that there is no real marketing and sales training. It’s become all about products.”
Mary Carroll wrote:
“I’ve been a licensed producer for 30+ years and an insurance professional for nearly 40 years, and I have a string of letters (including CEBS and CPCU) after my name. There’s a pretty simply solution to the MLR problem: charge a fee for your services.
“Though I felt ‘improved Medicare for all’ would have been a cleaner approach to health care reform, I opposed that because it would have put several hundred thousand insurance agency/brokerage employees out of work, and I care about the folks who do the kind of consulting work that I did for many years. But demanding that the MLR be lower so you can go on collecting (unchanged) commissions is simply dumb.
“Is your expertise worth two or four or eight percent of premium? Sell your clients! And if you can’t sell that fee, perhaps your expertise isn’t as valuable as you think. I understand the problem: under a commission system, some clients are paying more than the services they receive really justifies, while others demand so much that no commission would adequately support that level of service. But you’re simply going to need to be straight with your clients and tell them what the services they want cost…”
In response to Tragic Tale
David Paul wrote (via e-mail):
“I could find no fault with the thoroughness of the article, and your writing was, as always, superb. I was left, however, with a nagging sense of, “Well, that was an engaging human interest story, but what’s Bill’s conclusion?” I imagine it is that our healthcare delivery/financing system remains broken, and largely because it is, in your words, “a Wall Street-run system.” A secondary conclusion seems to be that PPACA has done little to redress its serious faults. But don’t most of us who grapple with this subject on a regular basis already know this?
“I’d be interested to know, if you could wave a magic wand, the three or four changes you’d make to rectify/perfect our healthcare system. Here is my attempt:
1. Instill in human beings a greater sense of personal risk management.
2. As a corollary to #1, instill in people the vital importance of obtaining life insurance, disability insurance, LTC insurance, and/or dread disease coverage (more risk management).
3. That said (#2), I would instill in corporations/business people/shareholders/(I guess all of us) a more measured sense of equitable distribution of wealth.
4. Grow the number of non-public health carriers in the country, preferably on a smaller scale, local basis. I especially like the model where integrated healthcare systems control the financing as well.
5. If you will indulge me in a #5: do more with catastrophic reinsurance. When/if insurers purchase excess of loss coverage on a per occurrence basis, they share the costs of these high severity/low frequency cases much more broadly and worry less about the money lost and more on the patient. “