January 1, 2011 is nearing at an almost blink-of-an-eye pace, leaving many health insurance agents worried and wondering what is going to happen to their ability to thrive financially.
There are over 2,500 pages of information regarding health care reform which was recently passed and many health insurance agents- no, make that mostly all insurance agents have no time to sit down and sort through all of the jargon. So, what is the cliff notes version? What will affect you, the health insurance agent the most? Plain and simple: sooner rather than later, insurance companies will no longer be allowed to deny individuals medical coverage due to medical conditions. As of September 23, 2010, insurance companies will no longer be allowed to deny coverage to children with medical conditions. Reality check? September 23rd is just 9 days away! Beginning in 2014, insurance companies will no longer be allowed to deny adults. In short, this means that if the insurance companies have to extend coverage to sick people, then two things have to happen. First, insurance premiums will most likely go through the roof in order to accommodate, or to make available more money to pay out on almost indefinite claims. The sicker the person, the more money will be spent on their medical care by the insurance company. Second, your commissions are going to plummet! In fact, starting January 1, 2011, insurance companies will begin to slash what historically allowed for a pretty lucrative lifestyle for agents down to, in some instances, barely making it. These insurance companies need to restructure their books and “trim the fat” so to speak. Where is the easiest place to take some of that fat from? YOU- the agent.
What is an agent to do? Should he or she move out of the financial sector and begin answering customer service calls at the local bank call center? Maybe. Should they go back to school and get a degree in another unrelated field? Maybe. However, most career insurance agents don’t have the time nor the desire to tear down what they have built and start over and in this case- if you are that agent who doesn’t want to start over, there are a few different options.
First and foremost, if you are not familiar with what exactly your license allows you to sell, become familiar and do it fast! Most health insurance licenses (depending on the state) go hand in hand with a life insurance license as well as a variable annuities license. If you do NOT have the life and annuities designation, do the homework and take the exams necessary to get them. These could literally mean the difference between you staying in the insurance industry and having to leave it to go join the circus. Once you have these designations, or if you already do, there is a particular school of thought that you are going to have to adapt to, and it is that health insurance sales alone are most likely not going to be your bread and butter any longer.
Second, get close and personal with life insurance. Nothing to do with health care reform touches the life insurance industry. In fact, the life insurance industry is still booming- and actually, always has been. It is known to be where the real money is as far as selling insurance goes. Most health insurance agents are used to a 15%-20% commission structure. Life insurance agents have been enjoying anywhere from approximately 55%-90% commissions and they have been doing so for years.
If you are a captive agent, contact the go-to person within the company and see if life insurance is something they have available for you to offer. If it isn’t, make your argument! Tell them why it should be especially now with what’s going on in health care. If after that, it is still not an option, you may want to consider becoming captive with a new company- one who does make life insurance available for you to sell. If you are an independent agent, it is as simple as getting appointed with a life insurance company and then marketing their product. Many agents who sell both health and life sell them “together” which means that while you are selling health insurance, you are talking about life insurance and vice versa. Pitch both at the same time and more often than not, you will walk away with two deals and a lot more money in your pocket than if you only mentioned health insurance.
So, there is a silver lining in the dark cloud called health care reform. It doesn’t mean you have to throw in the towel and find a new industry. You just need to diversify yourself by adding to the products you sell within the insurance industry and focus on maximizing your income while helping people.
