About 19 years ago my family decided to transition from the health insurance market to the critical illness market. At the time my brother and father had just had a remarkable year where their captive field force submitted over $330 million in health insurance premium. With that much premium and 2,500 captive agent’s there is barely time to sleep.
My father was always looking to the future and on a fateful day in 1993 he stumbled across a critical illness brochure while touring the supply room of an insurance company. He was a very short time retired from insurance but they were trying to convince him to head up their health insurance marketing. He taught my brother and I that you must always review the products in a supply room because it is where a hidden gem could be found. That day he found a hidden gem and today I am writing this to tell you that we have been there and done that so please do not sell critical illness using the checkmark on your health insurance application!
The face amounts of the critical illness plan he stumbled across were in the millions, the premium was out of sight and to qualify you had to give your first born! Being a father of three that are no older than 4 I would apply and ask if they wanted them all:) Anyways, my father realized that the plan had to have a minimum premium of $15-$20 and it had to be simplified issue. He also realized that the face amounts didn’t have to be in the millions; up to a couple hundred thousand would be more than enough.
At this time the insurance company agreed to file the plan as an add on to their health insurance so the client could just check a box. Everyone was very excited and it was off to the races. My brother Jim Jordan, Jr. was one of the earliest individual critical illness salesman in the country and boy was he successful. Jimmy managed to sell almost 300 plans in just a few short months and right there everyone knew the idea was something special. Just as the celebrations were ready to begin the other shoe dropped. I guess it would be more accurate to say that the other CheckBox dropped!!!
As you know a health insurance company strives to issue between 60%-80% of their business. For easy math we will say that the insurance company in question issued 70% of the business that came in the door and the remaining 30% was flat out declines or client rejections due to rate ups and riders. Having them both on the same application was an absolute nightmare. Look at the numbers.
If 30% were declined the health coverage you also just lost the critical illness coverage commission and your client isn’t protected!
If the client was rated up or ridered they didn’t want the CI coverage because of cost or anger.
When your clients get denied by a carrier they often take it personally and never wish to do business with them again. There goes additional coverage in place!
All of the above stays true for accident coverage. After this experience, almost two decades ago, we realized that health insurance should be sold though a health insurance company, accident insurance should be sold through an accident provider and critical illness should be sold though a critical illness company. This is definitely a situation where “one plan does not fit all”. We discovered that the only way an agent could maximize income, maximize client coverage, and save clients money was through product and company diversification.
Present your clients the benefits of the three plans separately and then tie them all together to give them the coverage they deserve and the income you have worked so hard for.
Short cuts like Check boxes for critical illness and accident might make your job easier but please remember that those very shortcuts will make you question your due diligence as an insurance professional. Is it right to offer 3 products though one carrier because it is the easy way? Personally I think offering the best of each product through the best carrier is a win-win-win. The client has more coverage than they have ever had before, they are saving more money than ever and you have diversified your income streams to protect yourself from life’s ups and downs. Critical illness and accident insurance doesn’t just maintain your clients quality of life; it maintains yours as well.
Please remember I work for you and I am always available to answer your questions.