Who should you buy group benefits from? We have identified that there are 2 types of insurance agents that sell Group Benefits.
1. Advisors
2. Spread sheeters
The type you choose to work with can greatly affect the success and stability of your Group Benefits program. So the question still remains; who should you buy group benefits from? We will now explain the 2 types, and you make the decision.
Advisors
Advisors are what I would refer to as Insurance Agents that are knowledgeable and skilled. They have a combination of experience and education. Also are aligned with a benefits provider that will provide a high level of service and support in order to meet the long-term needs of the business owner, plan administrators, and staff.
Advisors can anticipate issues before they arise. They will guide clients on how to avoid future issues that can, and do, arise in the absence of good advice. For example, if a client is looking for rate stability, then the lowest quote on a spreadsheet is NOT in the clients’ best interests.
Advisors provide advice and tell clients what they need to hear. Not necessarily what they want to hear (what a concept).
While a very small percent of insurance agents that sell Group Benefits can be included in the Advisor category. While this may be a small category, they represent a significant percentage of this market. They tend to have long-term clients as they focus on providing advice, realistic expectations, appropriate pricing, and coverage. This is done in order to help clients maintain plan stability.
Spread Sheeters
You will recognize a spread sheeter by of one of these typical phrases. Offering to:
- Shop the market
- Find the plan that delivers the “best value” for your business
- Get you the “highest coverage at the lowest cost”
If you were making a one-time purchase of a commodity, this might be reasonable. However, when it comes to Group Benefits, this approach creates rate instability making your program almost impossible to budget for. It creates an unrealistic expectation of what the level of benefits you chose should cost.
The extent of a Spread sheeters’ skill seems to be limited to get quotes summarizing on a spreadsheet. With the monthly premium totaled at the bottom of each column. Clients are most often told that with all things being equal, the highest coverage at the lowest rates is the best value for your business. If you choose to proceed with this approach, the spread sheeter is happy to have you as a client this year. But nervous about the fallout at renewal and their ability to retain you as a client for more than 1 year.
In my experience, most spread sheeters have short-term clients. Churning clients and insurers over and over, creating rate instability and volatility for the client until the client finally gets tired of the rates rollercoaster and finds an Advisor to work with.
Insurers – The Uncomfortable Reality
While Insurers prefer to work with Advisors, they are in a tough spot as there are a lot of Spread sheeters taking the same clients to market over and over. As a result, most Insurers have adopted the short-term “lowest price on the spreadsheet” approach. Because they know that if they are not the lowest price on the spreadsheet, they will likely not get the business from a spread sheeter. The Insurers know it is not the most stable approach, but the Insurers’ account reps have quarterly and annual quotas to meet.
ClearBenefits.ca believes an educated client, is a better long-term client.
Read our lates blog on that exact topic. Click here to read.
