There are lots of different strategies and tactics employee benefit sales professionals can tap to help jumpstart their disability sales in 2009. Pay attention as EBA has reached out to more than a dozen of the market's leading carriers to hear what advice their experts had for the universe of brokers and advisers. From making the voluntary connection to mapping underserved markets, industrious advisers will find dozens of good action items to help them complete a winning disability sales and marketing plan for 2009.
Our sincere thanks to the many carriers who took time out of busy holiday schedules to help ensure EBA readers have a happy and successful New Year when it comes to disability sales.
Craig Guiffre
SVP sales and emerging markets, Cigna Group Insurance
Make it a year-long effort.
Disability Insurance Awareness Month is celebrated in May, but educating employers about the benefits this valuable coverage can have on their businesses' bottom line shouldn't be limited to one month. Consider reminding employers of three new reasons disability insurance is a "must have" on a monthly basis.
Make smart alliances.
Partner with an insurer who has the expertise, resources, and stability to deliver on its promises to your customers. An insurance agent is as good as the company that he or she works with. Don't be afraid to ask questions about the sales rep's training, the average number of years' experience that the claims staff has, and information about the company's financial stability.
Be a smart communicator.
Employers are inundated with communications from brokers. So, being thoughtful in your choice of tactics could pay off in more ways than one. Take the time to personalize your messages and make what you're saying resonate with the individual employers you are communicating to.
Make their lives easy.
Everyone's always looking to accomplish their goals in a quick and easy manner. It's no different when it comes to understanding disability benefits. Make your employer customers (existing and prospective) aware of online tools and services, such as disability calculators and other resources to help make enrollment easier, which will help their employees make informed decisions in a quick, easy way.
Help the customer institute an effective return-to-work program.
Help your customers understand what clinical and contractual elements will produce the best return-to-work results. Demonstrating how these programs have helped other employers improve productivity and lower costs might be just the ticket you need to get your foot in the door with a prospective client.
Highlight value-added products and services.
Everyone loves perks. But, what a lot of people may not realize is that perks can often come with disability insurance plans. For example, some carriers offer will preparation services, or discounts on health and wellness programs at no additional cost. Make employers aware of how they can maximize the investment they are making in their employees.
Demonstrate ways to control costs.
You can't go wrong presenting employers with ways they can continue to provide employees with benefits at more affordable costs. Pose the idea of offering a low-cost disability insurance program (e.g. a mid-term disability or durational core/buy-up offering) or a product on a voluntary basis, all of which can be an affordable solution for both employers and employees.
Michael Fradkin
VP disability product management, MetLife
Educate yourself with information and statistics that illustrate how disability income insurance benefits both employers and employees.
Consider not only the opportunities to educate employers that currently offer no access to disability income insurance protection to their employees, but also employers that could offer opportunities for employees to buy-up or supplement additional coverage amounts on top of their basic coverage. MetLife's 6th annual Employee Benefits Trends Study found that 58% of full-time employees say they have disability income insurance protection, and almost half of those (41%) admit they don't know how much protection they have. The majority of working Americans (59%) have taken no steps to determine their households' needs with regard to disability income protection.
While the need for employees to protect their income is great, providing disability insurance can help solve business needs too. A benefit of a successful disability program for employers is the effective return to work of employees, which can help in managing longer-term costs and productivity issues. Arm yourself with an "elevator speech" that you can create from a variety of online resources, including MetLife's benchmarking tool (whymetlife.com/broker), the Council for Disability Awareness (disabilitycanhappen.org) or the Association of Health Insurance Plans (ahip.org).
Also key to growing your block of disability business is identifying under-penetrated markets. Disability income insurance protection is a benefit that can be a cost-effective addition to a benefits program. A disability benefits program aids employers in managing productivity and related absence costs and helps employees create a personal financial safety net.
Use benchmarking techniques to discover opportunities.
MetLife's benchmarking tool shows only 54% of smaller employers (with 2-49 employees) offer disability insurance as an employee benefit, compared with 86% of employers with 2,500-4,999 employees. Benchmarking by industry shows that only 58% of employers in the retail trade industry offer disability insurance, compared with 83% of employers in the education industry. Becoming immersed in understanding a particular segment of the market can not only help you with potential disability benefit sales, but also other benefits sales opportunities as well.
Keep on top of current trends and share insights with your clients.
In today's market, MetLife expects greater interest from employers in total absence management solutions. Economic pressures are causing employers to seek improved efficiencies and greater cost savings. An integrated approach to absence management can help employers achieve better tracking and reporting capabilities, efficiencies in administration and cost reduction, allowing employers to focus on managing their business for success. We are anticipating that employers, wherever they currently are on the absence management continuum, will desire information about moving their efforts in this area to the next step.
Stay current on emerging trends and new ideas.
Take advantage of continuing education courses to strengthen your ability to offer the best solutions to your client base. Some courses offered by MetLife and others in cities across the country and are free of charge. Topics for 2009 include: knowing group disability products and contracts; understanding the importance of disability underwriting and disability claims management; understanding individual disability insurance for the executive; and individual disability income insurance - contract and product.
Scott Beliveau, VP multi-line product center, Sun Life Financial Employee Benefits Group
Go to the doctors.
Expand your client base with physician LTD plans. Doctors have very specialized needs, and physician LTD gives them special contract provisions, higher benefit levels and custom claims service.
Consult the attorneys.
Call on local law firms and offer them an attorney LTD plan. The plans offer a specialty definition of disability, higher benefit levels and custom claims service.
Volunteer voluntary.
If a client is at risk of cutting or not purchasing disability benefits, offer an employee-paid disability plan to help them save without sacrificing coverage.
Package the offering.
Offer "life-only" customers group disability from the same carrier. Explain how packaging benefits streamlines billing, online services and claims processing.
Benefit from buzz.
Get your clients excited about new products and services. Disability insurance doesn't need to be boring. Carriers are constantly introducing new services to better support disabled employees and their employers.
Barry Petruzzi, 2nd VP group life and disability, the Guardian Life Insurance Company of America.
Take advantage of the times by promoting the importance of having disability insurance during a recession.
While it may seem contrary to intuition, the recession and economic anxiety can actually help to bolster disability insurance sales. More consumers are beginning to accept that their incomes are vulnerable. They are recognizing that they don't have enough savings and employing greater financial discipline. In fact, many economists are predicting that the U.S. savings rate will move out of negative territory for the first time in recent years. This is the time to be very vocal and help employers and employees recognize that they should not skimp on their income protection - particularly at a time of economic unrest and market volatility.
Robert Risk, VP group benefits, Lincoln Financial Group
In these challenging economic times, conventional wisdom would say reduce expenses wherever possible.
However, when performing a cost/benefit analysis, it would be a mistake to overlook the value of offering disability insurance. Help employers to see the overall value this coverage provides. Review the cost of disability insurance as a percentage of payroll costs. It's one of the best values in employee benefits, at less than 1% of overall payroll. Or, suggest employers consider offering a voluntary plan, rather than eliminate the coverage altogether.
Research underscores the importance of this benefit to employees. A 2007 insurance audit conducted by Claritas shows that 51% of responding group policyholders stated that if their employer stopped offering disability insurance, they would purchase the coverage elsewhere. When employees' most valuable asset is their income, and they have clearly indicated the importance of DI, responsible employers can't afford to cut disability insurance and leave employees unprotected.
Brad Nantz, VP of Sales, the Standard Insurance Company
As employers modify medical plan designs to reduce cost, adding a disability plan can widen protection.
Employer-sponsored LTD plans can be structured to cost less than $20 per employee per month. Make sure your clients are aware that with investments and retirement plans taking a big hit in this market, employees who become disabled will have a smaller financial cushion than normal to help them while they aren't able to work.
The average American household in 2008 has financial assets to last roughly 10 months on disability, compared to about 20 months before the credit crunch. Based on our block of LTD business, we know that 55% of LTD claims last for 10 months or more.
You can help your clients control costs while still providing income protection for employees.
Suggest a 50% gross-up plan instead of a traditional 60% benefit employer-paid plan. All else being equal, these gross-up plans cost around 14% less than comparable 60% employer-paid plans with 100% participation.
Sean McCartney, National VP of group specialty benefits sales, the Principal Financial Group.
With a challenging economy, employers are looking to reduce benefit costs while retaining key executives.
Consider offering an employee-paid, short-term disability plan while lowering income replacement coverage paid by the employer to 50% for long-term disability. Then enhance with individual disability income insurance for top executives, which provides a tax-free benefit.
Consider offering non-executives the opportunity to enhance their employer-paid, long-term coverage through a voluntary purchase.
Look for a provider who offers a needs-based analysis to determine appropriate individual coverage. Consider group disability plans that allow for maximum tailoring. The addition or removal of options within the plan can be tailored to employer needs, allowing participants to pay for just the benefits they value. For example, an employer group with a younger employee base may find higher value with a return to work childcare benefit. Employers with a more established workforce may see more benefit in a retirement plan supplement or dependent education benefit.
Look for no or low-cost value-added benefits that are included with the coverage, such as an employee assistance program or other discounts.
Look at purchasing disability and other group employee coverage from the same provider to receive multiple product discounts.
Kevin Murphy, 2nd VP of channel development, Assurant Employee Benefits
Cross-sell, cross-sell, cross-sell.
Any gap in coverage with a group means revenue left on the table, and an opportunity for your competition.
Find your point of differentiation.
Do you position yourself as the hunter providing clients the lowest cost on the spreadsheet of carriers? If so, you may be blending in with every other producer in your area. From technology to value-added services, find something that sets your agency apart.
Cast a narrow net.
Narrow your search and enhance your focus. Have you been successful within a particular industry? Or are you most profitable with a particular size group?
ZIP it.
Plot your business by ZIP codes. You may quickly identify pockets that are business development opportunities.
Be a community organizer.
Traditionally, producers networked at community events like those sponsored by the local chamber of commerce. Today, communities also exist online. From blogs to LinkedIn, look for ways to communicate your expertise.
Get published.
Be the local insurance expert. From a guest column in your daily newspaper or weekly business publication to online blogs, sharing your thoughts on a topic is key.
David Gittelman, Director of marketing, Reliance Standard Life
Insurance Company
Show the need.
When employers are cutting back (workforce, compensation, employer-paid percentage of health coverage, etc.) nothing says value like group disability insurance. It's something everyone would want if they understood the likelihood of being separated from their paycheck by an illness or injury. You can find compelling tales of woe and redemption on the Life Insurance Foundation for Education's Web site, lifehappens.org/reallifestories/disability-insurance/
Target the high wage earners.
Don't assume those who make the most are either a) immune or b) adequately covered. The fact is, most group plans are inadequate for most high-earning execs or sales producers. The answer? Sell them twice - once for the rank and file, and once as a carve-out class; or as an individual DI prospect; or as a supplemental or "combo" plan. In this third option, you would add a separate "overlay" coverage for this subset of execs using a hybrid program that marries individual DI policies with group underwriting principles. Most major carriers can meet this split-plan design requirement.
Be flexible.
There's virtually no reason an employer should say "no" to group disability. As economical as employer-paid coverage is, there are even more economical options for the cost-conscious company.
- Core-buy up coverage means the employer pays a little for everyone, and the employee can "buy up" to a higher amount via payroll deduction.
- Contributory coverage means the employer pays a portion only for those employees who elect to buy coverage.
- And of course, voluntary or employee-paid coverage means the employee pays the whole cost of premium. If you're going after the employees themselves, make sure you get the appropriate enrollment support from your DI carrier.
John DeLorenzo, SVP of sales and account management, Prudential Group Insurance
Find a carrier that can analyze employee demographics and benchmark against industry and portfolio data.
Doing this will help determine which employees are participating, how much they are buying, what patterns of claims and absence are emerging, and what plan design changes can improve results. Based on that data, your carrier can help communicate the importance of insurance to those who are not participating - and the importance of healthy lifestyles, wellness, and ergonomics to high-risk groups.
The carrier should be able to provide life and disability insurance coverages, including short- and long-term disability insurance and absence management services.
Having a single carrier can help foster seamless, more efficient claim experiences for your clients' employees. In addition, carriers should provide professional and compassionate claim service and accurate data about absences, so your clients can determine how those absences may impact their bottom line.
Michael Scheetz, Assistant VP disability product development, Colonial Life & Accident Insurance
Ask your clients if the economy is forcing cutbacks in employee benefits such as sick leave and paid time off. Introduce them to voluntary benefits to compliment their existing coverage.
Income replacement through disability insurance is one of the top benefits needs for American workers, and many employers realize it's important to provide some form of group LTD coverage.
However, in today's tough economic times, some companies are cutting back on paid-time off and sick leave. That means employees may have a gap in coverage between the end of sick leave and the beginning of LTD coverage.
Voluntary STD insurance is a good solution that can integrate with an employer-funded group long-term disability plan. Look for a product with a variety of elimination periods that work with any paid-time off or sick leave program an employer may have. Your clients can offer the STD coverage to their employees and can fund all, some or none of the premiums.
Look for voluntary STD coverage with guaranteed issue, portability, "your job" definition and partial benefits features. Guaranteed issue is big in the marketplace, especially in a tight economy.
It means an individual product acts more like a group product with no health underwriting if participation and eligibility guidelines are met. Your clients can feel more comfortable that eligible employees can get a policy as long as any minimum participation requirements are met. Individual products are portable because the employee, not the employer, owns the policy. Employees can keep their policy if they leave their job or are laid off - another economy-hedging move. The trigger point on a policy with a "your job" definition is the employee's not being able to do his or her own job. Without this, the policy may pay benefits only if the employee cannot perform "any job."
Partial benefits are important because they promote return-to-work. Employees who are totally disabled can ease back into work and still receive a partial disability benefit. Conversely, disability products without partial benefits may encourage employees to stay out on disability rather than coming back to work for part-time pay and risk losing disability benefits.
Make sure clients are aware of coverage gaps. Insist that your clients include benefits education in their employee benefits package to keep their employees knowledgeable as well.
It's important to help employees identify disability coverage gaps they may have and show them how they can fill them. Often, employees may not realize they need a short-term disability product until you point out their coverage gaps. Plus, employees who don't understand their benefits don't appreciate them - making your client's investment in them money down the drain.
Take advantage of the opportunity provided by Disability Insurance Awareness Month in May.
Use this as a reason to promote disability coverage, one of the most readily accepted products in the voluntary world. Check out the Disability Insurance Awareness Month web site at www.lifehappens.org/diam. It's sponsored by the Life and Health Insurance Foundation for Education, and it has ideas and tools to help you promote disability insurance with your clients and their employees.
Don't wait for your client's annual benefits enrollment to check in with employees.
A benefit review may be appropriate if employees have had a change in job or salary, a change in marital status, the addition of a new family member or purchase of a home. Employees may be experiencing more than one of these situations, which could signal a change in need for disability coverage.
Bring your clients more than a disability product spreadsheet.
There's a lot more to offering your clients a valuable benefit for their employees than what the product covers and what it costs. Be sure the provider you bring to the table makes you look good throughout the enrollment process and beyond. Look carefully at the provider's reputation for customer service, benefits communication capabilities, national account expertise, industry leadership and recognition, underwriting flexibility, breadth of product portfolio and other factors important to you and your clients.
