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Dear Everyone!
It's been a while since I've had some time to do what is called B2B cold calling. I'm sure most of you do this from time to time... you get out there and go door to door, store to store, office to office, introducing yourself, passing out a flyer, etc.
I like doing it. Sure, a few people kick me out, but the overwhelming majority are really very nice... and some of them become clients... or they refer me.
So I welcome those new B2B folks I met last week.
Lots to say... so here goes!
-Al
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| Group Poop |
We know that the idea of universal coverage of some type scares the hell out of insurance carriers... but what scares the bejabbers out of agents who sell group? It's the same thing!
For those of you who don't know the first thing about group except that you have to decide on it each year, here is the deal... a bit watered down
A company of two or more decide they want to offer medical benefits to their people. They call a broker, the broker gets a census of the workers and gives the business owner a ton of quotes.
There are rich plans and poor plans and a thousand-and-one plans in between! And there are a few rules. One of them is the percentage that the owner must pay. Most often it is 75% or more, although a few carriers go down to 50%. Most owners pay 80%, a very few pay 100% (and that's the company YOU want to work for!)
There is also a participation level of 75% of eligible employees? What is an eligible employee? It is one who is not waivered. So what is a legitimate waiver? Being on Medicare or Medicaid is one. Having COBRA is another. Being covered by another GROUP... usually one's spouse is the most common... is another waiver. What is NOT legitimate? Having your own individual coverage! (Don't ask why... you really don't want THAT lecture from me! My blood pressure is high enough today!)
So if you have a company with 15 people and 5 are waivered, that leaves 10. If the carrier requires 75% participation, it means 8 of the 10 must be willing to join the group.
What if three guys have their own coverage and decide to decline? Well, most often the participation level is not reached and there will be no group (however, there are ways to game this system and a good agent knows the tricks! And guess how popular those three guys are!)
Now here is a biggie. Unlike individual coverage, group is guarantee issue. That means there is no underwriting! In plain English it means there are no medical questions. If you are alive and work full-time for the company... you get accepted into the group (might be a waiting period, but you won't be turned down.)
This is HUGE. If you have no coverage and get a disease such that no carrier will touch you... all you need to do is find a job that offers group medical and you're good to go. (Starbucks offers good benefits!)
Now fast-forward a few years from now and the government makes it easy and mandatory for each person to get their OWN coverage. Perhaps the employer will have to pay for it... or pay a tax... but will there be a group? No. There will be no need for one.
But what about the agents (like me) who sell group? We're going to get killed. Group is a good deal for employees AND agents. Why? We can write a whole company and there are no underwriting hassles.
OK, the commission is only 7% a year... but if you write enough groups (or you write a 'whale') and they stay with you, it's not a bad living. Say you have a group of 10 and the monthly premium is $250 per employee or $30,000 a year. 7% of that is $2100... year after year. And what happens if you have 20 or 30 groups in your "book." Now you know why agents want to write group and NOT individual plans.
If group goes away... there goes a lot of income with it.
So when you hear agents (like me... but not me) yell and scream about single-payor, individual, mandatory coverage, as they said in the Watergate era... follow the money!
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| LTCI
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What were the first initials that you came across as a kid? Mine was LSMFT. You have to be a certain age to know that it means Lucky Strike Means Fine Tobacco... and you have to be a certain age to know what a Lucky Strike was? ("The product that went to war"... a brand of cigarettes... maybe still made?)
LTCI means Long Term Care Insurance. I bring it up because I have been spending a lot of time looking into several "lines" of this product to start selling (or as some say... badgering people about!)
LTCI is not a new product... been around for years and years... but many of the plans were... well... simply crap. They were too expensive, or they came from marginal companies, or they had poor coverage, or they had too many moving parts that no one could understand them, much less sell them.
Well, LTC has come a long way and I think this is the year you are going to see a big push by both the government and the industry to raise awareness and get people on these plans.
It's a no brainer. With my generation slated to live well into their 80s, there will be a huge number of people who are going to need several years of LTC. Will Medicare cover it? It doesn't now... and I don't see it in the future.
I'm not going to pitch LTC to you now. Either you see it... or you don't. And if you don't, you will in the coming year. Plans have finally matured, they have flexible options, and they have the backing of just about every state government through what are called Partnerships... which I'll explain another time.
Will the life insurance companies roll over and play dead? Not on your best day. You are going to see many life companies change their policies by adding LTC riders such that if you need to go to a nursing home you can pull part of your death benefit to cover it. Yeah, your beneficiaries won't like it... but that's tough!
There are FOUR coverages that people need to have. Medical, disability, life, and LTC. Most have major med through a group plan. Most are covered by a partial disability plan by the state if they are employed. But most don't have any life and even fewer have LTC.
Previous generations didn't need all of these coverages because medical care was a lot cheaper than it used to be, so if you didn't have medical insurance you could still afford to be sick. If someone was disabled or needed long term care, families took care of each other. Most people had some life insurance but it was not as important as it is today because the previous generation SAVED THEIR MONEY.
When people died... they had savings accounts or other cash assets. What do most people have these days? Non-liquid equity in their homes (which is starting to lessen) and a mountain of debt.
Bring on an event that will cause loss of income, such as a disability (even short term... a couple of years) or the need for long term care... and go to the dictionary and learn how to spell b a n k r u p t c y!
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... And To All A Goodnight!
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On that cheery note, let me send all of you my best wishes for a happy holiday and wonderful New Year. And if you are going to make some New Year resolutions, please make one of them about lowering your financial risk to things outside your control.
I know that everyone jokes about insurance agents and how we are perceived to be pushy and high-pressure. And I know you don't want your son to become an insurance agent or your daughter to marry one. But try to get past the stereotype because these days agents are better trained, have abandoned the tired, old sales methods of the past, and are well positioned to be helpers and enablers in getting your financial house in order.
Sure you might want to have a stockbroker or a CPA or a tax preparer. These folks are great at helping you make money. Men and women like me are trained in how to help you keep it, how to manage the risk of losing it, and how to efficiently use it to keep you from going broke in your old age... and to pass a legacy on to your children or grandchildren.
People go into this biz not to get rich... but to help others from becoming poor. You should resolve to speak with an agent next year, if for no other reason that to pick his or her brain on how you can mitigate the risk that is all around you.
As I tell people every day (especially healthy people with no medical coverage) "Don't take risks you don't have to take."
Call me.
Don't be the person I speak to each day who says "I get your newsletter and I really like it. I just fell and broke me knee. Can you get me medical and disability insurance? If you can't, I'm going to lose my savings."
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Well, that's a wrap for this issue. I hope you've found some of the info above useful and interesting. If you have questions about life or health coverage, safe-money annuities, or employer group benefits just give me a call or send email.
Sincerely,
Alan N Canton
InsuranceSolutions123 Agency
InsuranceSolutions123.com
916-962-9296
CA License # 0F31110
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Al Canton, Owner
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I'm Al Canton, owner of the Insurance Solutions Agency.
Everyone promises the best service, etc. So I won't bore you with that message.
Bottom line, I know health insurance, work-supplements, medicare, life, and annuities.
Most importantly, I'm honest. I will not put you in a product just for the money. I've been here 25 years and I've built my business reputation on integrity and honor.
It's that simple.
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