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Life Health > Life Insurance

The new frontier under PPACA: Selling disability and life products

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Historically, producers have focused their time and energy on one of the most utilized and important benefits: medical insurance sales. Medical sales account for a significant portion of producer revenue, making this particular sale a no-brainer in the past.

Although, as the Patient Protection and Affordable Care Act (PPACA) legislation is implemented and the Medical Loss Ratio requirements impact producer revenue, now is an opportune time to focus on other critical employee benefitsto supplant lost revenue. The next conquest: Disability and life products.

Disability and life products are often complex, and making the sale can be challenging for seasoned producers who have not been traditionally focused on ancillary benefits. In the wake of PPACA, producers looking to diversify their product lineup can open the door to secure a new, or expanded, client base.

Tip No. 1: Get a lay of the land

The competitive landscape is ever-changing — impacting the smallest independent producers to the largest consulting houses. Broker acquisitions and retirement attrition are new realities. With fewer young people entering the industry, the producer workforce continues to gray. Because of the introduction of PPACA, many producers are faced with even more pressure to stay on top of their game.

See also: Aging producer workforce on minds of “State of the Industry” panelists

For these producers, embarking on new product sales and client acquisition is an opportunity to carve out a differentiating niche. Producers have an opportunity to hone their understanding of disability and life product portfolios as well as learn carrier underwriting requirements. These producers will be at an advantage with both customers and carriers.

Producers who are well-versed in these products and procedures can achieve greater success when interacting with carriers. Savvy producers perform due diligence in presenting the merits of a case for consideration including:

  • A brief narrative of any formal employer risk mitigation programs in place and relevant results or metrics
  • Client profile or overview
  • Complete census and census summary
  • Claims experience
  • Rate and carrier history
  • Reason for the market check

It’s imperative to lay the foundation to achieve credibility with the carrier to obtain the best coverage and rate for your clients.

Tip No. 2: Know your partners

It is vital to understand the key carriers in the life and disability markets. Producers should become familiar with the carriers in each space and consider these carriers’ strengths and weaknesses. Which industries are they well-suited for? Are they risk-averse in some markets? Do they favor a certain size company, such as small, midsize or large?

To find the right carrier partner for clients, seek clarity and get specific. The market is dynamic, so do not make assumptions. Circle back with carriers on an annual basis, at the minimum.

Tip No. 3: Continue to add your value

The crux of an insurance sale is the basics. As producers gain confidence on disability and life product portfolios, they cannot compromise on the three essentials — be consultative, meet and exceed customer needs and add value to the equation.

To differentiate themselves from the competition, producers must build a value proposition for clients. It is more than delivering a good rate to customers. Producers must provide proof of savings that can be obtained and bring forward intangible resources that align with the client’s business goals/strategy and corporate culture.

Employers are looking for guidance from their producers, particularly down-market. To be consultative, producers should guide their customers and help them make difficult benefits decisions.

PPACA is often viewed as a game changer for our industry, and it is more important than ever before to seek new product portfolios upon which to capitalize. Under the new frontier of PPACA, producers can get ahead of the curve by expanding their sales of disability and life products.

For more on employee benefits, see:

Exchanges 2015: Enrollment to start Nov. 15

The 3 biggest challenges to the disability insurance market

3 ways to pitch worksite LTCI


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