Selling health insurance is a tough business. It’s not a created sale, it’s a replacement sale which means relationships must be destroyed before any chance of a sale is possible. Destroying relationships takes time, effort and money.
But that’s only the first challenge a legacy health insurance broker faces. There’s more.
Getting quotes through traditional underwriting is not fun or easy. It takes time, effort and money. Its not unusual to take weeks of effort to get a preliminary indication which invariably comes with all kinds of conditions and contingencies. Firm quotes 30 days out is a rarity. By the time the requested effective date rolls around and new information surfaces, all the time, effort and money getting to that point can be for naught, ending in an empty pocket failure to win the business.
Another challenge health insurance brokers face is keeping up with all the rules and regulations imposed by bureaucrats in Washington. There is not a broker on the planet that can keep up or remember all of this. Yet clients rely on them for accurate information and good advice, an often misplaced trust that could end up being adjudicated in a more formal setting, a process taking time, effort and money.
All of this work may lead to a sale but usually doesn’t. Brokers close about 10% of their prospects. The other 90% of the time they work without reward.
The sales cycle is long and arduous. It takes months and sometimes years of efforts and expense before a sale is made.
Is it worth it?
Industry insiders say average health insurance broker commissions are the equivalent of $30-$45 per employee per month. A book of business of 1,000 employee lives can generate a gross income of around $300,000 – $500,000. Most American workers never earn that much.
Once a broker establishes his block of business maintaining it takes time and effort to protect his relationships from circling vultures. Gone are new business acquisition costs and the time, effort and money involved in chasing windmills, leaving more time at the golf course stroking relationships.
Is there an easier way to “make it” in health insurance brokerage? Uncle Miltie and others like him have developed their own methods of making more while working less. There’s merit to that.
