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The market for supplemental coverage through employers is growing at a silly rate. The Affordable Care Act has turned the industry on its head and employers and employees alike are scrambling for ways to not get buried by out of control healthcare costs. Agents who already sell life and health products can make an easy transition to this fast-growing market by providing supplemental products or voluntary benefits. It’s worth your time to check it out.
Just about every story we read about healthcare these days is typically about the problems. And, there are a LOT of problems.
Heading into Year 2 of the Affordable Care Act (Obamacare), employers are faced with increasing costs in which most will pass on to their employees, who get a double whammy because of high deductibles. Head for cover if you’re a young family with a child on the way. The days of not being able to afford to get sick… they’re here.
Let’s talk about solutions.
We at Redbird Advisors have been screaming from the mountaintop about the opportunity for agents to sell supplemental coverage packages similar to Medigap coverage, which fills gaps in healthcare coverage for seniors on Medicare. Supplement policies will cover some of the out of pocket costs that can often reach into the thousands of dollars for issues like accidents and critical illnesses like cancer.
“With supplemental policies or polices through voluntary benefit programs if something catastrophic does happen like cancer the insured can get some money back in their pocket,” said Dane Warren of Washington National (one of Redbird’s go-to carriers for voluntary benefits). “They can use the money for whatever they want. The benefits are paid direct to the insured.”
Voluntary benefits are a simple concept:
- Offer benefits to employees through their employer where the employee pays 100% of the cost.
- The premiums are paid through payroll deduction.
- Depending on the size of business, employees should pay less in monthly premium than what they could get on their own outside of their employer.
- There may be instances where employees who would not qualify for a product on their own will get that coverage through an employee-sponsored program.
- Some of the most popular products for Voluntary Benefits are Critical Illness, Cancer, Accident, Supplemental Medical, dental and vision, and others.
- And, what’s great for employees is that the policies are often portable, meaning the employee can take the policy with them if they retire or leave the company.
Want to learn more about how you can get started offering Voluntary Benefits?
Call Drew Gurley at 866-547-8780, ext. 102
Glance at these stats from an online nationwide survey recorded by Harris Interactive on behalf of Transamerica Employee Benefits (TEB):
- 65 percent of employees say it’s important that their employer offer these products (voluntary benefits).
- 47 percent of employees surveyed haven’t been offered an additional voluntary product since health care reform was implemented in 2010.
Whether you call them supplemental policies or voluntary benefits, we believe the biggest opportunity is with companies having 50 or fewer employees.
“Small employer groups are those being affected most by health care reform and some businesses are having to make tough decisions,” said Warren. “I was involved recently in an enrollment with a business with 30 people. It had to drop its group medical plans and we were enrolling them into individual health plans and also putting the voluntary products in there to fill gaps. I think the small groups are where the huge opportunities are.”
Washington National will take groups down to as few as three employees and if the business doesn’t have capabilities for payroll deduction it will deduct straight from the employee’s bank account.
“These small businesses have traditionally been underserved with voluntary benefits,” Warren said.
Warren offered another tip for agents.
“These (supplemental) products may allow a business client to raise deductibles on the healthcare they provide and provide these types of supplemental products at a low cost of offset the change in deductibles. We see this as a huge opportunity.”
Product of the week: Allianz Life Pro +
Allianz Life Pro + is an extremely competitive Indexed Universal Life product that offers individuals an alternative to their traditional employer-sponsored retirement plan. Clients take advantage of the traditional 16% cap or the exclusive uncapped Barclays Index. The concept of paying taxes on the seed instead of the harvest becomes evident when your clients can access tax free income through policy withdrawals.
Call 866-547-8780 and talk to Drew Gurley, ext. 102.
Benefits:
- Exclusive Barclays Index
- Tax deferred cash accumulation
- Tax-free retirement income
- Multiple indexing options
- Chronic illness rider
- Accelerated LTC rider
- Terminal illness rider
- Children’s term rider
- Issue ages: 18-80
Redbird Chirps
- Life: misconceptions of whole life. Whole life insurance has gotten a bad rap over the last 20 years. As products tied to the equity markets became popular, whole life took a back seat. It is still a strong product and this story identifies five common myths.
- Benefits: how to differentiate yourself in a growing market. Good productsand good service will only take you so far. To stand out with employers in the voluntary benefit space you need to develop a unique positioning for yourself to separate your capabilities from others.
- Crowdfunding for final expenses. With the average funeral nearing $10,000 (and significantly more in some markets) creative entrepreneurs have come up with an innovative service called crowdfunding to help those in a time of need.
- Fact Finder: end of year means planning. Get prepared to help your clients get prepared. Our Fact Finder provides an excellent platform to better understand client needs, plans and concerns. Click here to download the Redbird Fact Finder.
