It has been my experience that when people are provided with enough information to make an informed decision, they will do what is right for themselves and their business. This is called informed group benefits decisions.
I had a conversation with a CFO that was entrusted with selecting a new Group Benefits program for his company. He related a comment by their broker that she does not believe in pooled benefits programs.
I’m confused, since when is there only one correct solution to any issue?
And why would the broker attempt to limit client choice?
Isn’t it up to a client to decide which approach is right for them as they are the ones paying the premiums?
Most people will make decisions based on their tolerance for risk. However, they need to be informed to make good group benefits decisions.
For example, do you prefer:
- Fixed-rate or variable rate mortgages?
- Mutual funds or stocks?
- Pooled or experience-based benefits?
There is no “right” or “wrong” answer. There is only what you are most comfortable with and the approach you believe will best meet your needs.
Which approach is right for you?
There are 2 main approaches to Group Benefits. And we encourage Advisors to ask some version of the following question in order to understand your tolerance for financial risk:
“What is more important for you when budgeting,
1. Being able to reasonably budget for the cost of your benefits plan going forward?
2. Are you comfortable with having no real idea of what your rates will be from year to year?”
This might sound like a loaded question. However, the reality is there is no “right” or “wrong” answer. The answer will help determine the type of approach you will be most comfortable with, helping create a successful experience for your business and staff.
If you answered that you would like to be able to reasonably budget for the cost of your benefits plan, a pooled plan may be right for you! Contact us today!
Click here to read our latest blog on Pooled Benefits Programs.
