Disability insurance is a relationship sale. There is no substitution for face-to-face interaction. This is where prospects evaluate your recommendations and learn to trust you—or not.
Voluntary guarantee issue (VGI) sales are not different from individual disability insurance (IDI) sales, except that all your prospects are employed by one company. To succeed, it is crucial that you invest sufficient time, do the leg work and build a very strong, trusting relationship with the employer. Everything else is secondary.
Once you have established the trusting relationship with the employers, their support is key through your enrollment meetings. Encourage them to attend your employee meetings. At those meetings, speak highly of the employers and the quality of the benefits they currently make available. Then speak to how the employers are now enhancing the benefits by offering VGI individual disability income insurance to the employees.
Build rapport and you will likely find success not only in your VGI IDI sales, but you could also see other ancillary business come your way. When you present a VGI plan, you will find yourself in front of a large number of people. If you set the table properly, there will be lots of opportunities to grow your business. Employees, executives, the human resources officers, will ask you, “What other areas do you work in?” or “What other services do you provide?”
In a recent VGI case, the employer complimented us on our IDI offer and asked if we could help him by writing life insurance on his top executives. This is a perfect example of the kind of additional business that can come your way, if you invest the time establishing trusting relationships.
And don’t forget, with VGI, at each annual enrollment the new business opportunities present themselves to you again and again—like an annuity. Each year you have new employees to add to the VGI plan.
A VGI Case Example
I accompanied a young broker to meet with an employer who owned a blue-collar manufacturing company with about 35 employees. Some agents would say this is too small a business to invest time in; however, if you do a good job developing the case (as I mentioned above) it will generate some nice revenue for you and add to your block of business.
Another thing to consider is that “small” businesses can continue to grow and in a relatively short period of time your VGI cases become larger cases with more lives.
Even though the manufacturing business was blue-collar, the income levels were pretty good. (My agency has had very good success with payroll deduction in the blue-collar market.) The number of lives in the eligible group was 30 and we succeeded in enrolling 22 on a voluntary basis.
The critical part of our meeting with the employer was comprised of what I call the “feeling” questions and answers: Why did he have a benefit program for the employees? What was he trying to accomplish? What was his primary intention for his benefit plan in relation to his employees?
We learned he was a second-generation businessman and his company was 60 years old. Half of his employees had been with him for 20 years or more. Some were his best friends. He told us about his business philosophy. He talked about his employees and family.
We learned he was a hard worker, a big sports fan and involved in his community. He had short term group disability insurance in place which offered a small amount of coverage to his employees. Several of the company’s officers were close relatives. We had the feeling that the employer was a truly caring individual who wanted to take care of his people, but like many small business owners, he had financial limits.
We showed him a plan where he could offer long term group disability (LTD) insurance with an option to buy up to VGI IDI. Because both types of coverage were offered by one company, additional LTD options were available to him at no additional cost.
We also described the tax advantages of employee-paid IDI and the higher level of coverage that would come with the VGI. For his officers, we could do an executive carve-out by occupation class and obtain a richer plan than that for the hourly employees.
He chose a plan with a 60 percent group, employer-paid LTD plan and an employee buy-up option to VGI IDI and asked if we wouldn’t mind taking a look at his other insurance coverage.
Enrollment Essentials
Mandatory Employee Enrollment Meetings. No exceptions! Mandatory employee meetings are critical, and with strong employer support and trust established, they are not difficult to arrange.
Many years ago, I was working with an agent who assured me an employer had agreed to mandatory employee meetings in a VGI case. When we arrived at the company, we were shown to an empty office and advised that employees would stop by if they were interested. We had one enrollment.
From this stumble, we learned a valuable lesson. In our agency, we turn customers away who will not agree to mandatory employee meetings, but fortunately we have only had to do that once in the last five years.
In the case of the blue-collar company described above, we had meetings with all employees and included spouses and significant others. The company was having an annual meeting and we were able to dovetail our enrollment to that. With the employer’s support, this ensured everyone would be present—and it was a convenient time for the employer.
Make the Employer Look Good. When we pitch mandatory employee meetings to an employer, we tell him that meetings typically last about half an hour. We then work with the employer to schedule the meeting(s) at the least disruptive time for that particular business. Employers appreciate that.
We tell the employers that there are three goals we strive to meet during employee meetings. I emphasize the fact that these are going to be educational meetings to (1) provide information on disability insurance and claims trends in the United States, (2) make the employer look good, and (3) review current benefits.
We invite the employers to attend the employee meetings and the employers typically compliment us afterward. Through their attendance, the employers see we are not blowing smoke when we say we’ll make them look good.
We review current benefits because employees often tell us they don’t understand the benefits they already have. By helping them understand their existing benefits, we accomplish several things. This, our very first interaction with employees, places us in a situation where we can help them. We establish ourselves as experts. In educating employees about disability insurance, we lay the foundation to discuss the benefits of our offer.
Obtain Signed Statements When Employees Do Not Choose Coverage. I recall an enrollment where only one employee out of 25 did not enroll in a VGI plan. About nine months after the plan was in place, that employee suffered a brain aneurism and lived with severe brain damage.
A couple of months after the employee’s disabling event, an attorney called us. We told the attorney that the employee did not have individual DI insurance because he did not sign up. The attorney asked us if we could prove that. I can tell you we were very relieved we had recently started the practice of requiring a signed statement from eligible employees to the effect that the employees are aware of the offer and have chosen not to accept it. This protects us as well as the employer. Once we explain the reasoning, employers want us to do that.
I would like to tell you a little more about the blue-collar company I mentioned earlier. That employer had other insurance representatives he had worked with for 20 years. The other agents did not take the time with him or bring the expertise we did. We find this to be true often. He chose to do business with us even though we had no business relationship prior to our first meeting with him. He was very impressed with how we set the table for him.
In my agency, we average employee participation rates in VGI cases that are well above the industry average, usually between 55 and 65 percent. We work very hard setting these cases up. When it comes to enrollment time, they are really very easy. I believe that is because we take the time to develop rapport with the employer and the employees.
We have done enrollments with groups of 1,000 to those with 25 employees, and it all starts out the same: Build a solid professional relationship with the employer by getting to know him and his company.
I started this article by stating that disability insurance is a relationship sale. I can’t emphasize that enough.
