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Nontraditional voluntary benefits

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Advisors and brokers alike are seeking new sources of revenue these days due to the changing benefits landscape and the impact of health care reform.

With all the uncertainty of what’s to come, one thing is for sure: Health care reform will alter the face of the insurance industry, dramatically affecting the way insurance is bought and sold.

Health and life insurance sales and employer-funded benefits have always been the sweet spot for advisors and brokers. In these changing times though, many advisors and brokers are searching for new ways to increase revenue or replace lost income.

Voluntary benefits are projected to become the new sweet spot.

According to a recent Eastbridge Consulting Group survey, 53 percent of brokers said they already sell more voluntary today because of reform, with 15 percent saying they’re selling significantly more. Another 32 percent expect voluntary to account for a larger portion of their sales in the future.

Many producers have already added the growing selection of traditional voluntary benefits to their offerings. These benefits, such as life, accident, cancer, critical illness, hospital indemnity, short- and long-term disability, vision and dental insurance, are designed to supplement core offerings.

The new voluntary benefits toolbox also includes non-traditional voluntary benefits that advisors and brokers are proactively cross-selling.

Like traditional voluntary benefits, non-traditional voluntary benefits are a great way for employers to extend their benefits offerings without incurring additional employer-paid premiums.

And, adding non-traditional voluntary benefits to their product portfolios allows producers to increase their revenue stream because they are selling additional products. These products can be an add-on for existing clients and could even be a door-opener to new clients. No additional licenses are required to sell non-traditional voluntary benefits.

Many of the popular non-traditional voluntary benefits in the marketplace today offer tangible benefits which workers can select to protect and preserve their income and lifestyle.

According to the Eastbridge study, wellness programs are sold by 73 percent of brokers, with discount health programs, legal plans, ID theft coverage, pet insurance, purchase programs and vacation programs also gaining traction.

Both traditional and non-traditional voluntary benefits help employers meet the diverse needs of their workforce by letting the employees choose what is most important to them.

One of those non-traditional voluntary benefits – employee purchase programs – is also helping employers with another HR objective – keeping employees productive.

An employee purchase program provides employees with a way to buy much-needed and unplanned-for household and lifestyle products and educational services, keeping them on budget and further stretching their hard-earned money. The employee purchase program is offered as a voluntary benefit through the employer via payroll deduction.

In addition to offering an attractive commission rate, non-traditional voluntary benefits can offer advisors and brokers an advantage over competitors who are marketing only the traditional voluntary benefits. One-size-fits-all products are a thing of the past.

As an example, adding an employee purchase program to your product portfolio:

  • Allows you to offer a more competitive package for your clients;
  • Means year-over-year revenue growth as our commission program isn’t front-loaded.
  • Gives you a recurring revenue stream through commission on every shipped order.

Companies that provide non-traditional voluntary benefits can help advisors and brokers with marketing their program year-round, by giving them access to sales tools and resources that help them identify prospects, explain the benefits of the program, and enroll new clients.

With the Patient Protection and Affordable Care Act (PPACA) requiring 85 cents out of every dollar premium be used to pay claims, carriers will be left with just 15 cents of that dollar to pay their expenses, including broker commissions.

There is no better time than now to be proactive and initiate or revisit adding voluntary benefits – both traditional and non-traditional – to your product portfolio.

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