Missed Group Health Opportunity w/Current Client

insurehound · 12-04-2008, 07:07 PM

So I have a client that has Group DI with me. I had originally seen him for Group Health and at that time, he had a solid relationship with another broker in my area. Even my Marketing company who knew this agent told me that this guy was extremely hard to compete against.

From time to time, I would follow up with him to see if we could compete for his Group Health business and the answer was no.

I get a call from this client today on a service issue and I asked him again if I could see if I could save him some money on his Group Health and I learned that his Daughter (now Office Manager) switched his Group business to a new agent that once worked with them selling AFLAC.

UGH!!!!

Lessons learned:

1.) Stay in contact with everyone who is involved in the decision-making.

2.) Never believe others who tell you that another agent is "too strong to compete against" as he lost the business as well!

3.) Sometimes you can't beat the fact that one of the decision makers will like someone who is closer to them in age and gender or will just like someone else period.

I guess the good news is that I get to keep my Group DI biz and have a chance to offer more Group DI to this client who has opened up a new company.

somarco · 12-04-2008, 08:06 PM

Do you write a fair amount of group DI?

Why?

insurehound · 12-04-2008, 08:10 PM

So that I can get in the door and compete for the bigger dollars for the Group Health!

somarco · 12-04-2008, 08:14 PM

Group DI is a disservice to the insured unless it is a voluntary plan and even those are usually lousy contracts. A better choice is individual DI for the tax advantage.

A buddy of mine specializes in replacing group DI with individual policies. Does quite well.

insurehound · 12-04-2008, 08:20 PM

I understand that and believe me, Individual DI was my first try but the client wanted to have something for his employees as opposed to nothing (even though I clearly pointed out the differences between Individual and Group).

I don't write a lot of Group DI...

ABC · 12-05-2008, 09:07 AM

It happens but I would not say you missed it. If you have been calling on them over the years and had some business with them already it sounds the new girl did not want to do business with you. This happens to me a couple of times a year.

This year I was working a case with 3 locations and about 50 employees. After a year of fighting for the group I get in. I was a couple of meetings away from getting the client and then the controller left. New controller had her own people.

I think your lucky she did not give over an AOR on the DI.

I have had cases where I picked up the health and they then gave me the AOR on STD/LTD.

insurehound · 12-06-2008, 12:44 PM

Thanks ABC, I agree.

Executive Benefits · 12-09-2008, 04:02 PM

Your still 'in" there, per say just not this year, make your self more "known" thru out the year and mabye you will have a better chance next year.

rsli-moses · 02-10-2009, 06:55 PM

Originally Posted by somarco

Group DI is a disservice to the insured unless it is a voluntary plan and even those are usually lousy contracts. A better choice is individual DI for the tax advantage.

A buddy of mine specializes in replacing group DI with individual policies. Does quite well.

Sorry for the late response, but I just had to ask why you think Group DI is a disservice to the insured?

Say you have an employer who wants to offer a competitive benefits package to attract the brightest employees. Wouldn't a group disability plan be one of the first things you would want to suggest after the medical? I think an executive with cancer or some other serious disorder would think it would be very beneficial and appreciate that the employer is paying for the premium. Especially since all the employees would be covered on day one without underwriting.

(As a disclaimer I am a carrier rep with Reliance Standard and group DI is one of our most popular products and I just had to register to respond to this post)

ABC · 02-11-2009, 10:08 AM

Originally Posted by rsli-moses

Sorry for the late response, but I just had to ask why you think Group DI is a disservice to the insured?

Say you have an employer who wants to offer a competitive benefits package to attract the brightest employees. Wouldn't a group disability plan be one of the first things you would want to suggest after the medical? I think an executive with cancer or some other serious disorder would think it would be very beneficial and appreciate that the employer is paying for the premium. Especially since all the employees would be covered on day one without underwriting.

(As a disclaimer I am a carrier rep with Reliance Standard and group DI is one of our most popular products and I just had to register to respond to this post)

In normal economic situations I would agree with you but right now people are lucky just to have a job. Employers really don't have to compete for top talent right now.

From a small group standpoint the employers are cutting contribution levels for the health insurance if they are even keeping the plan. So to come in with an employer sponsored DI I not real practical. Maybe voluntary.

benworthen · 02-26-2009, 06:36 PM

Group Disability works well for Small businesses that need guaranteed issue policies to protect against income loss for otherwise uninsurable people. It is a very valuable product in the right situation.

In fact many guaranteed issue policies pay on top of individual policies, with no coordination of benefits. Why an agent would make a blanket statement about the near uselessness of a product amazes me, when as a firm we have done 250k+ in commission on GI GD sales in the last 2 years, without even trying.

We are an accounting firm specializing in Strategic tax and estate planning and capture the ancillary business we see that needs improvement for our clients.

We even had a situation recently where a very wealthy doctor, who was uninsurable on a Business overhead Expense policy, paid for a portion of his costs with a Group policy. Guess it wasn't as useless as previously noted, pretty cheap coverage also.

Would I use it as a door opener if I was still cold calling? Probably not, but I wouldn't disregard it like some of the agents on this forum.

Tri-State · 03-26-2009, 10:30 AM

Originally Posted by somarco

Group DI is a disservice to the insured unless it is a voluntary plan and even those are usually lousy contracts. A better choice is individual DI for the tax advantage.

A buddy of mine specializes in replacing group DI with individual policies. Does quite well.

I had to register to respond to this, as it is highly inaccurate. In the interest of full disclosure, I am a carrier rep and we sell group disability.

Voluntary disability plans are going to have significantly higher rates than a group plan, and while some carriers have weaker contracts for their vol. offerings, other carriers offer nearly identical contracts on the true group and voluntary products.

The tax advantage is a moot point, as employer-paid plans can be "grossed-up" so as to protect the benefit payments from being taxed. The employers pay income taxes on the premium paid on their behalf, and receive their benefits tax free should they become disabled.

If an employer has their group life and disability contracts with the same carrier, it is highly probable that the waiver of premium for the life insurance will begin upon the completion of the elimination period for the disability. This means that the waiver of premium can begin sooner in most cases (typical 3 month EP vs. 6 month wait for WOP).

There are lots of advantages to a group contract, and not offsetting those personal plans is a big one as well.