P-C Agents Can 'Supplement' Portfolio

In most cases, employees pay the entire premium through payroll deduction. Employees choose which policies they want and often may continue their coverage even after they leave a job. In addition, the products are usually guaranteed renewable.

These plans typically include accident insurance, long and short-term disability, long-term care, cancer, intensive care, hospital indemnity, supplemental life, and yes, even "supple-dental."

Keep in mind that supplemental insurance policies are not designed to take the place of major medical coverage. Instead, the two complement each other.

While most employers and employees might know that most major medical plans pay a large percentage, but not all of their medical expenses, they might not be as well aware of the expenses and financial concerns that a serious illness or accident can leave with an employee.

With todays health insurance premium increases, combined with more out-of-pocket expenses paid by the claimant, it is an agent's job to educate employers about supplemental plans designed to help with these unexpected situations.

Years ago, supplemental carriers marketed their plans through independent "career" agents. Today, many of the agents appointed by the carriers are independent brokers. The carriers like brokers–both health and property-casualty–who have established payroll deduction insurance plans with their commercial accounts. And, in turn, a p-c agencys commercial customers can be ideal prospects for these products.

Traditionally, health agents have taken this product under their wing because it seems to fit into their product line, and because they already have the license to sell it. On the other hand, p-c agents might hesitate looking at the supplemental market because of some preconceptions about the industry. Some of these preconceptions might be that:

The p-c agent does not want to have to learn a new line of products that involves answering a lot of detailed questions to complete the enrollment.

The p-c agent is successful and might not have the time for it.

The agencys clients consult strictly on p-c questions and needs.

Other agencies are handling the clients medical benefit needs.

These preconceptions can be dispelled with simple explanations.

Agents dont have to learn a whole new product line. The producer does not have to answer detailed questions or take additional time to complete an enrollment. Productive agents simply introduce the supplemental specialist to their client, and let the specialist do what they do best. Once the enrollment is completed, the agent receives a commission, and in some cases can be advanced.

By simply opening the door, agents can earn a first-year commission of between seven and 20 percent of the annual premium. Renewal commissions are usually paid to producers who have written the minimum premium necessary, but vary by company.

If an agent wants to capitalize on this lucrative market, he or she should not assume that someone else has consulted on their needs for supplemental insurance with the client. In most cases, agents have developed long-term, trusted relationships with their clients.

Isnt it the agents job to consistently look for ways to help clients complete their insurance package, especially if there is little-to-no cost in doing so? The answer is yes.

What most p-c agents like about introducing these plans to their clients is that not only is there a surprising amount of interest, which makes you-know-who look good, but employees who leave their employer usually keep the plan and actually ask the new employer to continue the payroll deduction. Most supplemental plans are "individual" and not "group"–therefore, in most cases employees can take the plans with them at the same payroll rate.

Employees are asking about the availability of supplemental benefit options at work. And remember, an accounts key decision-makers switch jobs and are likely to call you once they get established.

Why do employers like supplemental plans? Because employees pay for it and most of the plans reduce the employers FICA taxes. The employer has little-to-no administrative duties. Also, employees who have received claims during a financially frightening time in their life are very unlikely to drop the protection.

My suggestion is to do your homework and have a local representative explain the best way to go about getting started. Once you sit in on a couple of presentations, you will begin to ask why you have not offered the plans to your own employees or purchased one yourself.

Jacqueline Reisner is a regional sales coordinator for AFLAC in San Diego. She can be reached at jacqueline_reisner@us.aflac.com

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, January 21, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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