So, your health care commissions have or may plummet, some by as much as 70%. You could blame the Patient Protection and Affordable Care Act of 2010 (PPACA) – that would be easiest thing to do. But, peel back the onion one more level and you get to the real culprit: the health insurance companies. They are the ones that created the “commission-based-on-percentage-of-premium” compensation plan many years ago that resulted in the very lucrative health insurance business that many agents now enjoy. The huge, annual (sometimes semi-annual) health insurance premium increases on inforce business created the unintended consequences of the a “cash cow” that lured many of you away from selling anything but health insurance. And, justifiably so.
But, the train wreck that was you all feared is now very likely to occurr. According to a report just released by NAIFA, ‘…since the medical loss ratio (MLR) provision of the health care reform law went into effect…many agents [have chosen to] reduce their services to clients, consider charging fees for services they had been providing at no additional charge and in some cases, laying off employees and leaving the health insurance market.”
You don’t have to do any of that. You can stay in the health insurance marketplace. Just go back to basics. Most of you started in the insurance business selling life insurance and you still sell life insurance here and there. So, get back to that market to a greater extent. In a previous article, we sited a LIMRA study that revealed more than 58 million Americans don’t have ANY life insurance or are underinsured, and of those people, the vast majority want to buy. That doesn’t even count those that are near the end of their level-premium term plans and have no agent to help them continue their coverage. Hello!!!
Don’t forget DI and LTCi, either. Cross-selling from medical insurance to those health insurance contracts is a no-brainer. And, remember to include discussing how your clients can augment their income in retirement by purchasing GUARANTEED-PRINCIPAL annuities now. Sure, credited interest rates are low – the best you can get is about 3% – but, you can’t lose your money like you can in the market And, the right kind of fixed index annuity might just fit the bill for your less risk-averse clients.
The opportunities for success in the broader personal insurance market is greater than ever. The middle-market is wide open because so few agents are paying any attention to it. You’ll earn as much or more by selling a lot of smaller-face policies than chasing a bunch of high-net worth could-be cases. Those large-face cases will drop out of the sky more often because you’ll be actively involved in a broader market segment.
You’re still reading this?!! Get going!