It is hard to beat the feeling of closing a disability insurance sales case. Imagine the excitement of closing a single case that leads to hundreds of disability insurance sales.
A fantasy? It’s not when you are selling an employer sponsorship program.
Employer sponsorship programs are targeted at small business executives and corporate executives. They include an employer endorsement that allows you to sell individual disability income insurance to employees. It’s a simple concept that is easy to understand and can be summarized as “win-win”
What makes employer sponsorship a win-win-win situation? “
Employers win by offering valuable employee disability insurance benefits that have been proven to increase productivity and morale. Employers still get credit for providing the benefit, even if they don’t pay for it.
Employees also have the option to buy important protection benefits such as paycheck protection at a lower rate and often with simplified underwriting. Progressive discounts are often offered by insurance companies based on the size and extent of employee participation. The plan may offer very liberal underwriting requirements when combined with guaranteed-issue and modified guaranteed-issue.
Third, the employer provides multiple sales opportunities for disability insurance. This allows producers to spend more time selling and earning commissions. Employer sponsorship often leads to higher persistency and more premium renewals. Perhaps the best thing is that larger disability insurance companies often have specialist who can guide you through the whole sales process.
Define employer target markets.
It is important to understand the target markets before you can get started. The large cases (100+) and smaller closely held businesses where employer sponsorship is most effective have been the ones that are more successful. Both are under-saturated as DI insurers have tended to focus mainly on fees-for-service professionals. Group LTD was responsible for the business market.
Larger corporations often offer long-term disability insurance that is employer-paid. Employers and employees may be familiar with the concept, but they are likely to be underinsured. For top wage earners, long term disability benefits limits can result in income replacements of less than 50%. Problem is compounded by the fact that not all employees or everyone can afford individual disability insurance.
Another market that is growing is the small business sector. Individual disability insurance is offered by businesses that have less than 100 employees. This makes them more efficient and financially conservative. This leaves a large segment of the workforce uninsured.
Employer sponsorship is the ideal solution to the problem of limited benefits dollars and underinsurance. Employer sponsorship offers the best way to increase disability coverage. It allows you to add individual disability insurance to your group long-term disability plan.
Refine your sales approach.
Once you have a clear understanding of your market, it is time to improve your sales approach. Start by identifying the key decision-maker within the company.
No matter if the person you are meeting with is the CEO, owner, benefits manager or other high-ranking executive, the goal of your next stop is to meet a client’s needs and not make a sale. Ask questions to get to know your client and take the time to learn about their needs. What type of coverage do you have? What happens if a key executive becomes disabled? Ask to review an existing LTD plan if it exists. Identify its weaknesses and explain how an employer sponsorship program can help.
Obtain employer endorsement.
Once the employer has agreed to sponsor the employee, it is crucial that the employer endorses the plan. This means that the company’s top influencers must support the plan with active and visible support. You can provide the appropriate support by sending employees endorsement letters from the employer on stationery and holding an employee meeting where you can discuss the plan. Make sure the meeting is focused on employee needs and simple.
Participation in disability insurance plans will rise if there is more employer support. Employee participation rates can reach 80 percent if there is active support. Participation rates can fall to as low as 40% if there isn’t enough support.
Sign up all interested employees to individual consultations at the conclusion of the employee meeting. Consultations should not last more than 15 minutes and focus on clients’ short-term and long-term goals, income, bills, and liabilities. You can discuss with your client the various options that they have.
While the process of sponsoring an employer is straightforward and simple, it can be beneficial to have a representative from a disability insurance company who is experienced in this type of sales. A professional carrier can help you create marketing plans and presentations and will assist you in designing the best plan for each employee and site.
Working with the right carrier can help you increase your client base by hundreds each time you sell disability insurance.