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Employer-Sponsored Multi-Life Plans (ESMPs). What they are, how to sell them and how to enroll participants. Marketing Opportunity. ESMP Marketing Opportunity.  There are more than 6.6 million companies in the United States. More than 50% of those have less than four employees.

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Employer-Sponsored Multi-Life Plans (ESMPs)

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Employer-Sponsored Multi-Life Plans (ESMPs)

What they are, how to sell them and how to enroll participants


Marketing Opportunity


ESMP Marketing Opportunity

 There are more than 6.6 million companies in the United States.

  • More than 50% of those have less than four employees.

  • 68% of all small businesses do not carry any DI coverage.

Source: US Census Bureau, 1998 Statistical Abstract of US.


ESMP Marketing Opportunity

% of Companies Providing Employee Disability Coverage

Number of Employees

Source: Response Analysis Corporation,1994


Trends in Worksite Sales

 Worksite sales for 2002 totaled an estimated $4.03 billion, a 15 percent increase over sales for 2001.

  • Companies are shifting away from employer-paid programs and moving toward voluntary, payroll deduction plans

Source: Eastbridge Consulting Group’s U.S. Worksite Study, 2002


Why People Don’t Buy DI

 Agents/brokers don’t ask!

  • Sales are being left on the table.


Objections to Selling DI

 Expensive

 Financial documentation

 Medical records

 Too many choices for plan design


Answering Objections

 Multi-Life Plans offer discounted premiums

 Guaranteed Issue program does not require financial documentation

 Guaranteed Issue does not require medical underwriting

 Plan design is done at group level


Selling ESMPs are

a Win-Win-Win

For Everyone


Insured Wins

 Guaranteed issue (larger qualifying groups)

 No detailed underwriting process

 Discounted premiums on unisex rates

 Rapid turnaround of application

 Higher income protection

 Can be employer paid


Employer Wins

  • Create perks for key employees

  • Deductible business expense

     List billing

     Reduce LTD costs

     Foster persistency and loyalty among key employees

     Allow employer to add an additional benefit without incurring additional cost


Agent Wins

  • No detailed underwriting process; streamlined underwriting

     Approach multiple insureds —

    cross-selling opportunities

     Discounted premiums on unisex rates

     One plan design for all

     Multiple sales — more commission $$$


Plan Specifics


How Does The Product Work?

 Guaranteed standard issue to those meeting eligibility requirements

 Targeted at executive/professional occupational groups within single employer (generally 4A and above)

 Minimum 15 participating lives for 100% employer-paid cases

 Plan design at group level

 Can be 100% employer-paid, partially employer-paid, or 100% employee-paid


Plan Design

 Generally with LTD

  • Carve out

  • Wrapped around group

  • Reverse carve out

     Own-occ-to-65/not working (marketplace definition)

     Available riders

  • Residual/partial

  • SIS

  • Inflation

  • ADL

     No drug/alcohol limitation (no DAMN rider) on employer-paid cases.


Plan Design

 Minimum Participation

  • – Employer Paid— 100% required; minimum of 15 participants

  • – Voluntary— 30% target; minimum of 20 participants


Plan Design

Employer-Paid and Voluntary Plan Specifications

*For cases with 15-69 eligible lives, the Home Office will consider making an offer on a Guaranteed Issue basis. Such an offer is contingent on a minimum of 15 paid lives. If fewer than 15 paid lives are written, full underwriting will be required. Discounts and GI maximum Issue Limits are the same as for cases of 70-149 eligible participants.

**The maximum amount available can vary based on the characteristics of the group.


Plan Design

 Guaranteed Issue Maximum I&P Limits for Employer-Paid Cases:

 Specific plan design and maximum Guaranteed Issue amounts depend on group characteristics:

  • - Industry - Turnover rate

  • - Occupations - LTD experience

  • - Financials - Age

  • - Local economy

     Each case is different.


Discount Structure

100%Voluntary GI

Employer-Paid Eligible

ParticipationEmployees Discount

15 – 49 70 – 149 20%

50 – 99 150 – 299 25%

100+ 300+ 30%

Note: Discounts for qualifying voluntary 20-69 life cases are the same as for 70-149 cases.


100%

Employer-Paid

Participation

15–49

50–99

100+

Voluntary GI

Eligible

Employees

70–149

150-299

300+

GR

(ages 61-64)

FYC

30%

25%

20%

Noncan

FYC

40%

35%

30%

Commission and Schedule

Renewal commissions are 10% in all years.

Note: Commissions for qualifying 20-69 life cases are the same as for 70-149 cases.


Bonus Schedule

 Paid in years 2-10

 Up to 5%

 Based on and applies only to GI premium

 Varies each renewal year as follows:

  • Inforce premium of $25,000-$99,999 and persistency of at least 85% = 2% bonus

  • Inforce premium of $100,000+ and persistency of at least 85% = 5% bonus


How to Present A Case


Presenting a Case

Prospecting

 Few agents are talking about DI

 Make a list of prospects

 Look at your personal database, especially executives in firms

- Without knowing it, many executives are being discriminated against with the Group Plans


Presenting a Case

Case Scenario

 Employer offers 60% to $5,000 LTD benefit

 Executive earns $120,000


Presenting a Case

 Example:

Gross Monthly Income: $10,000

Net Monthly Income:$ 8,000

(Assuming 20% tax rate)

Gross Group LTD Monthly Benefit: $ 5,000

Net Group LTDMonthly Benefit: $ 4,000

(Assuming 20% tax rate)

This represents 50% of the monthly take home pay.

 Multi-life helps close the gap


Presenting a Case

Pre-approach Letters

  • Send pre-approach letters to prospects and follow-up with a phone call.*

*See ESMP Marketing Guide, UC 4362 for samples.


tal coverage.

Supplemental Disability Income Protection Plan

Proposed for:

Supplemental Disability Income Protection Program

Proposed for:

ABC Company

Prepared By:

Agent

Address

City, State, Zip

Phone, Fax

Date

Presenting a Case

Approach Presentation

  • Use the approach presentation with an employer to explain how Supplemental Disability Income Protection works.*

*See ESMP Marketing Guide, UC 4362 for samples.

Prepared by:

Agent

Address 1

Address 2

City, State Zip

Phone, Fax

Date

UC 617 (12/03)


tal coverage.

Supplemental Disability Income Protection Plan

Proposed for:

Presenting a Case

Proposal Request Form

  • Use this as a fact-finder on the approach interview to gather information from your prospect and to request a proposal from the Home Office.*

*See ESMP Marketing Guide, UC 4362 for samples.

Prepared by:

Agent

Address 1

Address 2

City, State Zip

Phone, Fax

Date

UC 617 (12/03)


tal coverage.

Supplemental Disability Income Protection Plan

Proposed for:

Supplemental Disability Income Protection Program

Proposed for:

ABC Company

Prepared By:

Agent

Address

City, State, Zip

Phone, Fax

Date

Presenting a Case

Proposal

  • Use the proposal to present your solution.*

  • Proposal includes:

    • Sample offer letter

    • Illustration showing the LTD benefit and eligible individual DI coverage

    • Examples of Enrollment Kits

*See ESMP Marketing Guide, UC 4362 for samples.

Prepared by:

Agent

Address 1

Address 2

City, State Zip

Phone, Fax

Date

UC 617 (12/03)


tal coverage.

Supplemental Disability Income Protection Plan

Proposed for:

Presenting a Case

Marketing Materials

  • Use this leave-behind brochure (UC 3135) with the employer along with the approach presentation and proposal.

Prepared by:

Agent

Address 1

Address 2

City, State Zip

Phone, Fax

Date

UC 617 (12/03)


tal coverage.

Supplemental Disability Income Protection Plan

Proposed for:

Presenting a Case

Short-Form App

  • Cases approved for Guaranteed Issue use a short-form app (UC4348 –state specific).

*See ESMP Marketing Guide, UC 4362 for samples.


Enrollment Process


Proposed for:

Enrollment Process

Beginning Steps

  • To make your job easier in selling ESMPs, we’ve captured the best practices of experienced producers in this market.

  • Just follow the timeline and use the materials included in the ESMP Marketing Guide (UC4362) and before you know it, you will have completed and ESMP enrollment.


tal coverage.

Supplemental Disability Income Protection Plan

Proposed for:

Enrollment Process

Timeline – Prior to Date of Enrollment

  • Allow minimum of 30 days from the date the employer signs the offer letter and the date enrollment meetings are to begin.

  • Inform the employer you will be holding one or more 30-minute group meetings and/or one-on-one individual meetings.


tal coverage.

Supplemental Disability Income Protection Plan

Proposed for:

Enrollment Process

Timeline – Prior to Date of Enrollment (cont.)

  • Forward to Kathy Hoff, at the Home Office, any updates to the census or any other information about any LTD plan or plan design so the pitch kits are accurate.

  • Assemble team of enrollers and schedule any necessary training.

  • Send first announcement letter (UC4419), on sponsoring company letterhead, two weeks before enrollment meetings.


tal coverage.

Supplemental Disability Income Protection Plan

Proposed for:

Enrollment Process

Timeline – Prior to Date of Enrollment (cont.)

  • Send second mailing, Q & As (UC4420) about the program, one week before enrollment meetings.

  • Once enrollment kits are received, prepare a file for each eligible participant with:

    • Pitch kit (UC4417 or UC4418)

    • Pre-printed short-form application (UC4348 – 2 state specific)

    • Blank long-form application (UC2550 – state specific)

    • Designing An Income Protection Plan brochure (UC861)

    • A case history sheet to take notes (UC4421)


Proposed for:

Enrollment Process

Timeline – Prior to Date of Enrollment (cont.)

  • Meet with enrollment team one week before enrollment is to begin.

  • Check with your contact at the sponsoring company that a private site has been arranged for your presentations.


Proposed for:

Enrollment Process

Timeline – At Enrollment Site

  • Have company contact confirm each eligible employee will be attending his/her enrollment meeting.

  • Make notes on the DI Case History Report (UC4421) immediately after each meeting.


Proposed for:

Enrollment Process

Timeline – After Enrollment

  • Write a thank you note to each person who applies for coverage.

  • Create a spreadsheet of all applicants to track underwriting program. (Use UC4422)

  • Keep your company contact informed of progress.


tal coverage.

Supplemental Disability Income Protection Plan

Proposed for:

Enrollment Process

Timeline – After Enrollment (cont.)

 Keep each applicant informed of the progress on his/her case.

  • Send letter when case is approved. (UC4423)


tal coverage.

Supplemental Disability Income Protection Plan

Proposed for:

Enrollment Process

Points to Remember

  • Attempt to complete enrollment within two weeks.

  • Deliver all contracts.

  • Meet with employer to discuss ongoing administration.


Congratulations. You are now prepared with all you need to sell an ESMP.


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