Alternative to Selling Health Insurance?

GreenSky · 09-21-2007, 08:41 AM

I'm concerned that our ability to earn a living selling health insurance is going to be severly limited in the future. California just about ready to mandate coverage which I believe will either force or allow carriers to cut our commission. When you need to buy something, you don't need to pay salespeople.

I've been looking at Critical Illness plans as an alternative. I understand that in England, this type of plan has great penetration. Perhaps when clients don't pay insurance carriers for health insurance, they are more willing to buy other plans.

I'm looking for feedback from people who have sold CI. Is it an "easy" sell. Do people see the need?

By the way, I'm not giving up on Seniors but would like to continue dealing with people who don't drool. Also, I have owned CI myself for 7 years.

Rick

al3 · 09-21-2007, 10:37 AM

From what I understand most (stand-alone) CI plans have low premiums such that I don't think you could earn a living on them unless you can do volume via group.

I sell these via Colonial to groups (Aflac has similar plans). The rate for a CI with Cancer for a 40 year old non-smoker is $1.28 per $1,000 coverage (per month). $5,000 min, $50,000 max. So $20,000 policy will cost $25.60 a month. I would assume that non-group plans would not cost much more than that.

I think the alternative to selling IFP is selling group or worksite which is why I stay with Colonial, although I do more IFP than worksite right now.

Worksite is a slow sales process, especially for larger groups. And sometimes you have to go through their broker (who can often bring you biz if they like you. Colonial will commission a broker. Good deal for them for just making a phone call introducing you!)

HTH.

Al
Adams-Blake Insurance Solutions

James · 09-21-2007, 01:47 PM

I would think if you are good at selling H/C, DI would be a natural progression. Bill it as the, "Other Half of H/C". As Al stated, you can do individual with Illinios Mutual for Bluecollars and group with them and Colonial. Now I refer to most small business as bluecollar in general, understand this may or may not be what you are now targeting with H/C, small business and individuals.

GreenSky · 09-21-2007, 05:38 PM

Actually I wasn't talking about group at all. I don't do worksite and frankly think that most of the products, while convenient, are overpriced.

I just placed a plan with Assurity and it appears they have a terrific policy. $50K for a 40 yr. old woman was about $700 per year (@ 80% commission).

My thinking on this is that if we are going to (at the least) take a commission reduction on individual health, perhaps this is a product we can sell successfully.

I was hoping someone on this board was writing this type of coverage and what the acceptance had been.

Rick

Winter · 09-21-2007, 06:12 PM

Originally Posted by GreenSky

Actually I wasn't talking about group at all. I don't do worksite and frankly think that most of the products, while convenient, are overpriced.

I just placed a plan with Assurity and it appears they have a terrific policy. $50K for a 40 yr. old woman was about $700 per year (@ 80% commission).

My thinking on this is that if we are going to (at the least) take a commission reduction on individual health, perhaps this is a product we can sell successfully.

I was hoping someone on this board was writing this type of coverage and what the acceptance had been.

Rick

Did a critical illness plan for a 52 year old client a couple months ago. Went with Mutual of Omaha. He has grand mal epilepsy and Assurity wanted to rate him up. Mutual of Omaha let him in at standard.

Winter

Consultant · 09-21-2007, 06:38 PM

Originally Posted by GreenSky

I'm concerned that our ability to earn a living selling health insurance is going to be severly limited in the future. California just about ready to mandate coverage which I believe will either force or allow carriers to cut our commission. When you need to buy something, you don't need to pay salespeople.Rick

Do you have references I can read on this?

Thanks

Sean

al3 · 09-21-2007, 07:06 PM

Originally Posted by GreenSky

it appears they have a terrific policy. $50K for a 40 yr. old woman was about $700 per year (@ 80% commission).

What CI plan did you sell?

A $50K plan with Colonial would cost $768 a year. The problem is that the commission is only 27% if you open (ie. sell the account) and an additional 15% if you enroll... 45% if you do both.

What does Assurity got? I'm interested in this approach as well.

Al

James · 09-22-2007, 08:36 PM

Originally Posted by GreenSky

Actually I wasn't talking about group at all. I don't do worksite and frankly think that most of the products, while convenient, are overpriced.

I just placed a plan with Assurity and it appears they have a terrific policy. $50K for a 40 yr. old woman was about $700 per year (@ 80% commission).

My thinking on this is that if we are going to (at the least) take a commission reduction on individual health, perhaps this is a product we can sell successfully.

I was hoping someone on this board was writing this type of coverage and what the acceptance had been.

Rick

I have had no luck with CI, even with Sterling an them pushing the Combine CI, no luck! Plus everything I see the sales are fairly flat and not living up to billing or the success CI had in the UK.

But, they keep saying that it'll catch on, maybe so? Yet, I use it as a fall back to DI, I really can not see someone choosen CI over DI if they can afford one or the other.

James · 09-22-2007, 10:38 PM

Originally Posted by GreenSky

Actually I wasn't talking about group at all. I don't do worksite and frankly think that most of the products, while convenient, are overpriced.

I just placed a plan with Assurity and it appears they have a terrific policy. $50K for a 40 yr. old woman was about $700 per year (@ 80% commission).

My thinking on this is that if we are going to (at the least) take a commission reduction on individual health, perhaps this is a product we can sell successfully.

I was hoping someone on this board was writing this type of coverage and what the acceptance had been.

Rick

Just curious, are you talking about Assurity Balance?
http://www.bmcagency.com/documents/PrGuideFull_CI.pdf

GreenSky · 09-23-2007, 08:53 AM

Originally Posted by James

Just curious, are you talking about Assurity Balance?
http://www.bmcagency.com/documents/PrGuideFull_CI.pdf

That the one. I think it's been updated. Here's the current guide:
https://info.assurity.com/forms/PDFs..._ProdGuide.pdf

Rick

James · 09-23-2007, 12:33 PM

Originally Posted by GreenSky

That the one. I think it's been updated. Here's the current guide:
https://info.assurity.com/forms/PDFs..._ProdGuide.pdf

Rick

Thanks for the link

TonyC · 10-07-2007, 10:19 AM

Rick,

What do you mean "mandate coverage?"

How will this limit your commission?

Thanks....

Tony
(newbee)

Originally Posted by GreenSky

I'm concerned that our ability to earn a living selling health insurance is going to be severly limited in the future. California just about ready to mandate coverage which I believe will either force or allow carriers to cut our commission. When you need to buy something, you don't need to pay salespeople.

I've been looking at Critical Illness plans as an alternative. I understand that in England, this type of plan has great penetration. Perhaps when clients don't pay insurance carriers for health insurance, they are more willing to buy other plans.

I'm looking for feedback from people who have sold CI. Is it an "easy" sell. Do people see the need?

By the way, I'm not giving up on Seniors but would like to continue dealing with people who don't drool. Also, I have owned CI myself for 7 years.

Rick

TonyC · 10-07-2007, 10:22 AM

Rich, (or anyone else)

Please...I'm a newby and wanted to understand exactly what you were saying...

What exactly is the proposd mandate in CA....and how would it affect your commission?

Thanks very much...

Dave020 · 10-07-2007, 11:01 AM

Under the proposed plan, everyone in CA (residents) would be mandated to carry health insurance, either individually or through a group.

Employers above 10 I believe would be required to provide health coverage to their employees or pay into a state pool to provide coverage if the employer chooses not to.

Individual coverage would likely be two-tiered, Tier A would be underwritten coverage with lots of choice and flexibility, Tier B would be guaranteed-issue state mandated plans for those who cannot pass underwriting.

Providers would be required to pay something like 4% of either revenue or payroll to a new tax to help fund the mandate.

For agents, our commission might be reduced to account for the state mandate the all health insurance use at least 85% back towards health care. Carriers will have to reduce certain expenses, including probably commissions, to meet the 85% or better rule.

Dave
The David Fluker Health Insurance Agency - Gilroy, California - Serving California Residents Since 1995

somarco · 10-07-2007, 11:29 AM

If CA is no longer a viable market, you have 48 other states to ply your trade.

(Georgia is already spoken for . . .)

TonyC · 10-07-2007, 11:49 AM

Actually....i am more concerned that other states will Follow.

Ca. and NY have always been leader states....others may follow...

somarco · 10-07-2007, 05:44 PM

In case you haven't noticed, MA is still struggling with their mandate. Of course if you want to see what happens when states get crazy with over-regulating the health insurance industry, just look at the states with mandated guaranteed issue.

If the working public is disenchanted with the cost of health insurance now, just wait until (if) the states go wild and really screw things up.

newmindfashion · 10-09-2007, 09:46 AM

Dave020,
Unless I'm missing something, that scenario wouldn't appear to put health agents out of business. Sounds workable from a free market point of view.

SC Local LAH Agent · 10-10-2007, 02:43 PM

Mass is manditory health insurance also a guaranteed issue state. The fine for not having health insurance is $200 much cheaper than any yearly premium. Also agents I know there get the same comissions as everywhere else. Don't worry yet.

Dave020 · 10-10-2007, 03:03 PM

Originally Posted by newmindfashion

Dave020,
Unless I'm missing something, that scenario wouldn't appear to put health agents out of business. Sounds workable from a free market point of view.

From agent's perspective, I suspect the only real impact on agents would be a somewhat reduced commission schedule...maybe. Since the enactment would likely require insurers to use at least 85% towards health care costs (most are using a bit lower than that) it may happen that our compensation takes a slight drop on standard business. Other than that it is fully workable.

I am pretty much already doing all of this, most of what I write is GI anyway and I don't get 20%/10% commission on that business, closer to 5% steady which is probably what it would be dropped to anyway.

Dave
The David Fluker Health Insurance Agency - Gilroy, California - Serving California Residents Since 1995