Supplemental Suitability

I own a business and have a question for all the health insurance agents out there:

Where are the agents focusing on suitability requirements for worksite supplemental benefits?

Employer groups are not one-size-fits-all when it comes to their employees, and assuming so may insure some of my employees well, but leave others majorly exposed.

When a group like mine is looking at health insurance, we contact multiple insurance companies for quotes. Or, we contact a broker to sort through it and provide us with the best options that come back from our request for proposals (RFPs). Why is this not a requirement for our supplemental benefits as well, especially with the varying lifestyle needs of different employee demographics?

Let’s look at a sample provided: If carrier A has an Accident policy with a monthly premium cost the same as carrier B, carrier C, and carrier D, how is the determination ultimately made to go with one of the carriers? It’s usually by name recognition or the HR person’s relationship with a specific carrier representative. Unfortunately for the employees, these carrier representatives will often tell us, the employer clients, “This is best for you,” simply because it is the sole or major carrier they represent. Who checks to see if that carrier or set of plans is truly best for my particular employees?

Real-life numbers showed that carrier A, carrier B, carrier C, and carrier D literally varied by pennies per week in premium costs ($3.99-$4.15 per week between the four carriers in this example). However, standard payments to an insured for a covered injury, the carriers can pay up to four times more, or less, depending upon your selection, than the other carriers for the exact same accidental injury and course of treatment.

· Carrier A pays $370 under their base plan for this closed fracture of a forearm

· Carrier B pays $460 under their base plan for this closed fracture of a forearm

· Carrier C pays $800 under their base plan for this closed fracture of a forearm

· Carrier D pays $1,500 under their base plan for this closed fracture of a forearm

· Disclosure: Each of these may have additional riders for purchase at additional premiums to increase payouts. For this article, the base policy and the top-of-the-line policies were compared to make sure the true cost vs. value was represented.

So, if my employee population is young and active shouldn’t you all have a suitability requirement to compare accident policies for my company and employees in addition to finding suitable traditional health insurance? As licensed agents, isn’t this part of your responsibility?

Or, if my employee population was more mature and more likely to visit their retirement planners on the weekend than visit a group of friends on a hiking or biking trail, shouldn’t it be an obvious recommendation for comparisons of critical illness policies to help protect their nest egg in the event of a life-changing medical diagnosis?

When there is a diagnosis of cancer or a heart attack, even with health insurance, a person’s out-of-pocket expenses can skyrocket. This is true not just for health care in network, and for out-of-network surprises, but for missed work, lost wages, travel expenses, requirements to pay for yard care that can no longer be done on their own, and so on. With critical illness, cancer, and hospital protection policies, there are many ways to inexpensively cover these items and protect employees’ savings accounts. Receiving a lump sum payment of $50,000 to cover additional costs and lost wages during recovery time can allow an individual to save their retirement funds until it is time to enjoy retirement.

Your job as an agent is to protect your client and ensure you are assisting them in areas they may not even know to ask about. Unless you are a carrier representative, your clients should take priority over your carrier appointments.

Agents’ carrier representatives are great go-to people for specific answers to specific questions relating to their company’s policies. However, they are not necessarily going to be able to provide you with the all-encompassing view you need to have when representing a clients’ best interests. For stringent suitability requirements to exist for other policy types that protect an individuals’ income or retirement, U.S. insurance agents should assume this responsibility whether it is a legal requirement to do so or not.

Set a higher standard for yourself, and review what would be best for your clients. This includes the little supplemental benefits (those inexpensive little policies that are often ignored by traditional major medical agents, but can be the one thing protecting clients when other policy types leave them exposed).

“I am your agent.” That is a powerful statement and should represent only the best to clients. If you can’t help with a certain aspect of the client’s needs, bring in a specialist.  If you are too proud to bring in help, or are afraid of losing business to the person you ask for help, were you really the best agent for that client to begin with?

To inspire an interesting thought process for you and other agents in your office, briefly ignore the aspect of privacy laws for this hypothetical situation, and look at it this way. Would your clients choose to remain with you as an agent if they spent a week in your office? Would they retain your services if they sat in on your appointments, and on your calls, completely able to see and review the way you worked?

Obviously, they aren’t able to do so. But, everything you do should continually emphasize “I am your agent!” as if your client was sitting right next to you. If you don’t keep this in mind, other agencies like mine will.

Yes, I am a business owner, and an agent. And I firmly believe that most clients expect us to review alternatives and test for suitability on top of doing what they asked for in the first place. By operating this way, we can educate our clients and provide them with more options.