Sellling Health Insurance: How to Contract

What we’ll cover today is training for new health insurance agents on how to get contracted (appointed) and how to avoid the typical landmines. As always, visit was at www.ihiaa.com 

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How to Sell HSAs

For today let’s go over my favorite way to sell HSAs. I feel it’s a mistake to simply show the HSA plan by itself. When you watch the training video below you’ll get a great way to sell HSAs. As always, if you have any questions please vistis the www.ihiaa.com

 

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Colorado Requires Health Insurance Agents to Disclose Commissions

Colorado House Bill 1385 which requires agents selling health insurance, dental and short-term medical to disclose commission went into effect January 1 2009. 

Commissions must be disclosed in the form of the commission percentage earned (15%, 20%, 25%) and must be kept by the agent on file for five years. At this time the carriers will have the proper form. 

Also at this time none of the forms are available as part of the online E-signature process. We can only hope that within a short time all individual carriers in Colorado implement an online system since everyone does not have access to a fax. 

Although likely designed with good intent, this new law can do nothing except confuse the general public. Commissions are built into the rates and do not change. It doesn’t matter if a client chooses an agent or signs up directly with the carrier. Does the general public know this? Absolutely not. 

However, this will give many people the illusion that they are being quoted “higher rates” when working through an agent. If a client signs up directly the form does not have to be signed since no commission is generated. 

This also puts agents who have worked hard to earn a higher commission percentage at a disadvantage. Yes, an agent selling at a higher level can explain that the rates stay the same however the client comparing rates from two agents – one earning 15% and the other earning 20% could tend to go with the agent earning less. 

This is also misleading to clients who will falsely assume this is pure profit. Agents have expenses that most people will not take into consideration. However, it is what it is so all Colorado agent are advised to comply and make sure it’s explained to clients that commissions are built into the rate.

How to Navigate Your Underwriting Guides

Video Post – scroll down

A fantastic tip for new health insurance agents is not only to go through their agent/broker guides and brochures but also to organize the information. You always want to quote proper rates and also put client’s with the correct carrier. 

For example, assume you have a client who’s 56 and hasn’t had a physical within the past 3 years. You recommend “Carrier A” but unfortunately come to find that they require a full physical within the past 3 years. Declined. You could have put them with “Carrier B” that did not have that requirement. 

Another very important piece of information is how your carrrier’s deal with pre-existing conditions in conjunction with prior creditable coverage. The video tuturial below will get more into that subject. 

 

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Becoming an Independent Health Agent

So you either are currently selling health insurance with a captive agency or want to go independent right out of the gate? Not a problem, however there are some steps to follow. First, let’s cover the benefits of becoming an independent health agent:

• You are truly self-employed. You don’t get calls from your “manager” pestering you for production. The carriers don’t care if you submit five applications a day or 1 per year. There are no production requirements from any carrrier for independent agents. You only get into production requirements if you want to become a general agent. 

• You own your book of business. What’s a book of business? Your clients! Chances are if you’re with a captive agency you do not own your book. Simply put, if you leave you can no longer contact your clients. This is called a non-compete clause. Also, depending on your contract you also need to be with your agency for a certain period of time before you keep renewals. This is called the vesting period. For example, if you contract states that it takes “1 year to vest” this means if you leave before 12 months you lose everything – your clients and future renewals. 

• Write with all the major carriers. If you’re captive you can only sell through the carrier(s) your agency with contracted with. This greatly limits the choices you can offer your client. The problem with this system is you live or die depending on whether or not that carrier(s) is competitive. If they are not competitive you  have to convince your client to take an uncompetitive offer. You also will have a high lapse rate as your clients, over time, cancel to take a better offer. When you’re independent you can obviously write with the most competitive carrier(s) in your state. 

• Keep your client at the time of renewal. All carriers increase rates annually. A lot of carriers also come out with new plan designs and rates. What you’re find is when it comes time for renewal you’re going to have to explore the options with your client. You’re either going to: A) Stay put. B) Re-write through same carrier to get new business rates or another plan (if possible – not all carriers allow re-writes.) C) Write through another carrier. If you cannot explore all possible options due to being captive you’re going to have a very high lapse rate as time goes by. 

• Security. Carriers either have gone out of business, become uncompetitive or acquired a bad reputation. If you’re captive with a carrier you will watch your sales plummet if the carrier goes south. Either that or you’ll find yourself conducting “hard close” presentations to gain business. If that’s the case you might as well sell time shares. When you’re independent it doesn’t matter if your main carrier goes south. All that means is another carrier now takes over first spot which means you don’t skip a beat. 

• Not trapped by advance debt. If you’re captive and taking commission advances chances are your debt is due within 30 days of leaving. This can be a financial catastrophy and the liablity of taking advances through captive agencies is often not explained. When captive agents quit to become independent more often than not they find that they owe thousands of dollars due to unearned advances. 

So we’ve covered all the benefits of being an independent health agent. The next question is obvious; how do you make the switch? 

First things first. If you’re with a captive agency you’ll need to find out if you have any advance debt and how that will be handled if you choose to leave. You also need to read your contract. In some cases it’s a violation of the contractual terms to obtain other appointments while you’re still with your agency.

Some state department’s of insurance report appointments online. If your agency smells a rat they may be able to simply go online to see if you’ve obtained other appoitments. 

Before you pull the trigger you need to do your homework. Pull up a list of all available carriers in your state. You can always email us at admin@ihiaa.com if you want us to email the list. You need to make sure you’re in a competitive state before you become an independent health agent. If you’re not in a competitive state you might want to consider selling online in other states. 

After you’ve determined that your state is competitive you simply need to get contracted with the carriers. At this point you can read our post titled “How to Get Health Insurance Appointments.” 

As aways, if you have any questions about this topic feel free to contact us at www.ihiaa.com

How to Get a Non-Resident Insurance License

Video post: Scroll to the bottom for a video tutorial

There are many reasons you may want to obtain a non-resident license:

1. You live in a guaranteed issue state for health insurance
2. You wish to sell with a certain carrier(s) that are not competitive in your state
3. You live in a state that has low lead flow 
4. You have a referral and do not wish to find a resident agent to split commissions

Getting a non-resident insurance license is actually very easy. Scroll down and watch the video tutorial which will show you how to apply online in a matter of minutes. 

There are, however, some points to discuss before you apply for a non-resident insurance license

• Do your homework first since states have different mandates. For example, for health insurance you do not want to get licensed in a guaranteed issue state. You also need to be aware that some states have special underwriting mandates. Michigan and California for example do not permit exclusions while New Hampshire only allows a maximum rate increase of 25%. If you wish to sell in other states, try to target states that have the most liberal underwriting guidelines. 

• Fees vary widely from $8 to over $250 depending on the state. If you’re budget challanged you should be looking for states with low fees. 

• Make sure your products are competitive. You may be used to selling through certain carriers in your resident state and falsely assume they will be competitive in other states. For health insurance this is not the case. A carrier that has fantastic rates in one states may be uncompetitive in another. 

• Your carriers may offer entirely different products in other states. 

Click the link below for a larger version

Click for Video

 

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Online Insurance Training

Note: Video post – view our video at the end of this article

Are you still driving all over creation to see prospects? Still filling up your tank two or three times a week? Getting tired of hearing “You got a card?” or “We need a few days to think about this?”

Technology has made it possible to sell insurance online. Selling online maximizes your time. Instead of time wasted driving to and from appointments you’re spending more time with prospects and clients. Clients also prefer this method since it saves time on their end.

Before we get into some online insurance training let’s go over the benefits of selling insurance online:

• Savings on gas and wear and tear on your car
• More time in the day to conduct presentations and work with clients
• Expanded territory – sell hours away from your hour or in other states
• Clients prefer this method. It is far easier to conduct an online presentation then it is to schedule a meeting
• Better quality of life. Spend more time with your family instead of running around at night
• Promotes more ethical selling. When you don’t have to get an application signed on the spot it allows you to relax
• A better for agents who do not enjoy the “hard close” at the end of a face to face presentation

So, let’s get into the steps for selling insurance online either from your home office or work place:

Step 1: Qualification

When you call your prospect you’ll want to start a 4 step qualification process: 1) What is their level of interest? 2) Do they qualify? 3) What is their time frame? 4) What is their budget? After you’ve conducted a qualification you’re off to the next step.

Step 2: Desktop Share Presentation

With today’s technology and products available you don’t need to launch into a boring and confusing sales presentation. We highly recommend using a desktop share application. After you start the desktop share conference on your end you can either email and invitation or direct your prospect to a web address where they can log in and attend.

After they’re logged in they are now viewing your screen. It’s as if your prospect was sitting next to you. Now the presentation is visual and takes on an entirely new dynamic. They are impressed, interested and everything you discuss is easy to follow. They can view quotes, brochures, and underwriting guides.

Step 3: Offer Choices & Apply

After you’ve conducted your presentation always give your clients a choice. People do not like to be sold but they love to buy. If you allow them to buy you’ll have a client. If you try to sell you’ll hear “…get back with me in a few days.” People love choices and options so always give them at least two choices but never more than three. No one wants to sift through 4, 8, or 10 different products or options.

For example, for health insurance sales I would compare a HSA to a copay plan. For life I would recommend different term periods or term versus some permanent coverage.

For questions about this article contact the IHIAA or email us at admin@ihiaa.com

Click the link below for larger version

Selling Online Video

Getting Health Insurance Appointments: Tips on How to Contract

One of the most important decisions any health insurance agent can make is getting appointed with the carriers. Most agents, however, do not know the proper questions to ask or what to look out for when contracting.

Far too often agents find themselves trapped in bad situations and cannot escape. Why? Because one of our industry’s dirty little secrets that is often not found in print:

Once you sign appointment paperwork and start writing business you are more often than not trapped. If you choose at any point in time to move your appointment you’ll find out you need a release. The problem is releases are difficult or impossible to obtain. Most agencies as a business practice do not sign releases.

In order to get around needing a release most health insurance carriers require that you not submit any business for a six month period of time before you can move your appointment without a release. This, of course, can prove to be a career killer.

Let’s go over how to get appointed through some of the major health insurance carriers such as Aetna, Assurant, Celtic, Cigna, Coventy, Blue Cross, Golden Rule, GTL, Humana and World.

Do You contract Direct or Through an Agency?

You can contract directly through almost every health insurance carrier. However, that is not always the best way to get appointed. If you are in need of product training and support you’re better off with a solid agency.

Do You Need a Commission Advance?

You can choose as-earned or advances commissions. That decision is mainly determined by your current financial state. If you need advances you’ll need to make sure the agency you’re contracting through can advance of most of the major carriers such as Assurant, Aetna, Golden Rule, Humana and World. Also note that if you contract directly you may not be able to obtain advances through the major carriers. Some carriers will indeed offer direct advances while others require that you sign with an agency.

Do You Own Your Book of Business

The entire reason you’re an independent agent is to build your own book of business. It defeats the purpose of independence if you do not own your book of business from day one. What does this mean? It means that from day one everyone you sign is your client. You receive all commission and renewals during the life of the policy and you reserve the right to move your client to another carrier if that’s in the best interest of your client. Owning your book of business needs to in writing.

Are Y0u Receiving Top Commissions?

You should be receiving top “street level” commissions through each carrier. There is absolutely no reason to take reduced commissions as an independent agent. Some agents may state that since you’re new and need to be trained you’ll start at reduced commissions. However, there are far too many agencies that will not only give new agents top commission, but also provide them with detailed training and support

The Reduced Commissions vs Free Leads Pitch

A few agencies will attempt to place you at lower commissions in exchange for free leads. This is a game you can’t win and ofen it’s a sucker’s bet. Assume they’re going to place you at 15% commission instead of 20% and offer 20 free leads per week. If you write $10,000 in volume that’s $1,500 instead of $2,000 in commission for a difference of $500. Divide 20 leads into $500 and each lead cost $25! You can get leads for an averge of $7. So if you’re giving up $500 in commission per $10,000 written they need to compensate you with at least 70 leads per week. Aside from that, many agencies will give free leads in addition to top commission. Shop around!

How Many Carriers Do You Represent?

If you’re deciding on any agency you need one that offers contracts through as many carriers as possibly. Why? If you choose an agency that only offers two or three carriers you then have to find yet another agency to handle the rest of the carriers.

Where is Y0ur Office Located and How Much Support Staff do You Have?

You’re looking for an agency with a physical business location that has support staff. If not it’s likely they do not have the system in place to handle the training and support their agents need.

How is Training Conducted?

The better agencies have scheduled training sessions through webinars.

How are Releases Handled?

If you choose to move your appointment at any point down the road you’ll want to know their polices on releases. If they do not offer releases yet a promising things such as free leads you’ll want to get that in writing.

How are Commissions Paid and When?

You need a schedule of each carrier; if commissions are paid by the carrier or agency and when each carrier pays commissions.

Is the Agency Bashing Carriers They Don’t Represent?

Some agencies only represent a few carriers. The main reason is they do not have the production required to obtain general agent contracts with most of the carriers. In some of these cases the agency may bash the carriers they don’t represent by stating things such as they are not competitive, they don’t play claims, etc…The best advice we can give is to continue shopping for another agency.

Can I Hire Sub-Agents?

At some point in the future you may decide to hire agents and earn overrides. However, unless your agency can make you a general agent you’ll need a release to obtain your own general agent contract. If you cannot get that release you’ll be trapped as a writing agent.

One of our top recommendations for agencies? Health Choice One

For any questions about this article contact the Independent Health Insurance Agent Association at admin@ihiaa.com