Ancillary Plans Help Brokers Expand Their Client Base
Ancillary plans can drive new business for brokers looking to expand their product portfolio and their client base and, at the same time, provide a cost-effective way for consumers to enhance their health care coverage.
Many consumers new to the individual market don’t realize that by adding dental, vision, critical illness, supplemental accident and disability plans to their medical coverage, they can get much more from their health care dollars.
Brokers who take the time to educate clients and prospects about these ancillary plans often find that the extra effort pays off by generating additional business and building a more loyal client base. In the end, it can be the differentiator that determines which broker a client ultimately chooses for their health care needs.
“Ancillary coverage is a key component to my business. It allows me to do what I do,” says Alex Wertenteil, of Insphere Insurance Solutions, serving the Baltimore and Washington, DC area. “Ancillary products combined with a high-deductible medical plan can help clients control their costs. I explain to my clients that with the right ancillary plans they can go with a higher deductible plan, which costs them less because they know their critical health care needs will be met. I rarely sell a health plan without ancillary coverage.”
While dental and vision plans can round out a health care package for consumers and allow the broker to offer clients more complete coverage at an affordable cost, other ancillary products such as critical illness and disability income insurance can help individuals and families deal with the expenses and loss of income resulting from serious, unexpected illnesses or disabilities. A wide variety of ancillary plans available today allows consumers to select what fits within their specific budget.
This presents an excellent opportunity for the broker to build additional business by educating clients on what is available. Consumers in the individual market who are shopping for their own health care needs for the first time often assume that such plans are only available through employers, or they might think that individual coverage would be too expensive.
“More people are shopping around in the individual market,” says broker David Nelson, with Security Benefit Plans, Inc., based in Scottsdale, AZ. “Most of my clients are employed or own a small business. The majority work full time, and their companies have scaled back on benefits, or it has become more expensive to cover themselves and/or other family members. Clients are often interested in ancillary coverage like dental or disability, but they think it is out of their price range. When I show them a menu of what’s available and the cost, they can choose what they want. They often tell me that no one has ever really presented it to them before.”
Gwen Haven, an independent broker based in Cleveland, OH, who also serves the Akron and Columbus areas and is licensed in Texas, says many clients come to her for ancillary coverage when it is not offered where they work or they are seeking a better alternative to what their employer offers.
“For example, consumers come to me seeking dental coverage that is less expensive than what they can get through their work, or that provides better coverage than what they have available through work,” Haven says. “I want to make sure my clients’ medical and dental needs are covered first. Then I broach the subject to see if they have enough in their budget for any additional coverage.”
Haven adds that dental coverage is easy to sell because “it pays for itself” by covering routine dental visits as well as a large portion of other services. Most clients know that paying for dental work on their own can be an expensive proposition. Top-quality dental plans provide a set amount of financial support for a wide range of dental exams and treatments, even if the client goes out of the network.
Typical prospects for ancillary coverage include:
• Consumers new to the individual market who are accustomed to employer group benefits which often included ancillary as well as health plan coverage.
• Workers who are currently covered by employer health plans but who have lost or aren’t being offered ancillary coverage.
• Seniors on Medicare—and fixed incomes—who need ancillary coverage but often assume it is out of their reach financially.
• Families with children who don’t have dental or vision coverage and who need preventive care to avoid problems as they age into adults.
• Current clients who prefer to deal with one broker and one health insurer whom they know and trust for all of their coverage needs, including dental and vision.
Today, more major insurance providers offer a broad range of quality ancillary products for individuals and families.
“If you want to be successful selling ancillary products, you have to go out and see clients to do it. You have to go the extra step. Using a website or online medium is convenient, but creating a total protection package most times requires explanation and face-to-face interaction. This process also helps in making sure the business written goes through more efficiently, and also stays on the books longer,” Nelson explains.
Wertenteil suggests that brokers begin by educating themselves thoroughly on the benefits of ancillary products. “You should understand these plans inside and out. Then, by showing your clients how to think outside the box, you’re opening up a new world of health care savings for them. I consider us to be educators as well as brokers. It’s our role as brokers to show clients what they wouldn’t know about otherwise.”
by Susan Fowler for April 2012 issue of Broker World Magazine. Author’s Bio Susan Fowler, CFP CFP, has served as vice president of sales for Golden Rule Insurance Company since 1987.