Give Life [Insurance] a Shot!

Health insurance agents, welcome to the life insurance market.

With the Supreme Court upholding the Patient Protection and Affordable Care Act, it would seem many of the estimated 100,000 health insurance producers will either diversify their business or leave the health insurance market altogether. Many of you already have seen your commissions slashed up to 50 percent by carriers trying to comply with the medical loss ratio component of PPACA, making your commission-based business model unsustainable. Many of those hoping to adapt to the post-PPACA world will find that the new health care exchanges will lead to a huge migration from the traditional health insurance agent channel, which is predicted to substantially reduce the volume of business underwritten by agents.

While prospects look bleak in the health insurance market, I hope you realize the life insurance market—in desperate need of more producers—provides a great opportunity to rebuild your insurance practice. What you might not know is that the average age of an independent life insurance producer is 56, and producers are retiring faster than they’re being replaced. And these newcomers—usually with little to no experience in the insurance industry—wash out to the tune of about 85 percent within the first four years.

Don’t get me wrong: I think the independent life insurance distribution channel needs any and all new blood it can get. But the new blood it needs most is that of people with some experience in the insurance business who have a much better shot of making it over the long haul. Health insurance agents, this means you.

In an article I wrote for the July issue of Life Insurance Selling about the challenges presented by the independent distribution channel’s graying work force, Daniel Mulheran, president of retail life distribution at ING U.S. Insurance, said flat out that an opportunity to grow the ranks of agents selling life insurance is by looking to health insurance agencies.

“The Affordable Care Act has greatly reduced commissions to health insurance agents. These agents are making much less than they did in the past and can consider life insurance as a natural companion product,” Mulheran said.

In a press release put out the day of the Supreme Court announcement about PPACA, Garth Garlock, senior vice president and chief marketing officer at North American Co. for Life and Health Insurance, encouraged health insurance producers to try presenting cash value life insurance to their existing client base as a way to replace a portion of the income lost in the health insurance market due to PPACA.

“Rather than focusing on how the PPACA negatively impacts commissions, health insurance agents and brokers must embrace this new opportunity to help clients, while keeping their careers on a forward track,” Garlock said in the release.

So go ahead, frustrated health insurance agents—explore this opportunity. My bet is you’ll be welcomed by the life insurance industry with open arms.

From the September 2012 issue of Benefits Selling Magazine • Brian Anderson is the editor-in-chief of Life Insurance Selling magazine, and is a former editor of Senior Market Advisor.



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