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ABC Group has 250 employees and is interested in offering voluntary products and will grant you face-to-face access to each employee. The decision has been made to offer three products – our universal life, short-term disability income, and group accident policies.
The following assumptions will be utilized – a) The average age of an employee at ABC Company is 42. b) The broker is on a contract that yielded first year commissions of 90%, DI of 55%, and Accident of 52.5%. c) Participation for life insurance is 25%, DI Plus (16%), and Accident (15%). d) The annualized premium for each product could be as follows – life insurance ($442), DI ($450), and Accident ($176). Hitting each of the targeted assumptions could yield $52,978 in annualized first year premium.
The commission revenue generated could be $38,717.
Put another way, the broker has provided a solution that pays him/her an additional $12.90 per employee per month. That is across all 250 employees – even the people who did not participate in the voluntary offering!
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Worksite marketing can be financially rewarding for insurance agents.
Some worksite marketing companies have so many marketing levels that we wonder how there is any money left to pay claims. Somewhere on this blog we wrote about a 350 San Antonio employer group that does not know that they have 46 agents getting paid on their voluntary products (See – How Many Agents Do You Have Mr. Employer?).
The example on the left was part of an email blast to licensed agents in Texas, from a large nationally known insurance company.
With the uncertainty facing many group health benefits brokers, we expect many will concentrate on the voluntary benefits side of the business in the coming months. With numbers like the ones in the example, many will find a move to voluntary benefits just as rewarding as commissions earned selling group health insurance has been for the past 20 years.
Years ago we were asked to market voluntary employee benefits for a large national insurance company. We declined as “our plate was full”. The fellow who tried to recruit us is now earning over $1,000,000 per year on renewals alone, and has recently landed two large national accounts (Southwest Airlines and Pep Boys). We love success stories like this one.
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