Human beings are a short-sighted bunch.
On its face, it seems to make sense: The car payment is due -- let's not put aside our savings for this month. We need to buy a new house -- let's hold off on starting that 401(k). I don't make lots of money right now -- I'm going to wait to buy life insurance.
But with a little bit of looking ahead, one should realize that putting off certain purchases can have a major impact on their bottom line in the future -- possibly the near future.
We see it all the time in the insurance world. Consumers believe they'll never need long term care insurance and hence don't want to put aside the money. They don't want to think about dying, so they don't buy life insurance. They think they're fine for retirement, or haven't even thought about it, so annuities aren't even a blip on the radar.
These products could, in a pinch, be construed as luxuries.
But health insurance?
Yes, it costs more now than it did one year, five years, or 10 years ago. But what doesn't? Are people still shopping for groceries? Buying cars? Financing homes? All these things have inflated over the years, as goods will do in any healthy economy.
Along with the rising cost of health insurance premiums comes the rising cost of health care. Your clients certainly wouldn't want to be stuck footing the bill for an emergency room visit or medically necessary surgery. So why not put forth the effort and the pocketbook today to insure themselves against such astronomical financial liabilities?
Much has been made of the fact that the majority of bankruptcies are due to medical debt. While cost is a major objection in the purchase of health insurance, clients need to be made aware of the implications of not carrying health insurance. As industry expert after industry expert says, we insure our cars, our houses, our belongings, even, sometimes, our travel plans.
So why not our health?
Annual Health Study results
The results are in for the third annual Health Insurance Study, conducted in partnership with the Association of Health Insurance Advisors (AHIA), the Council on Disability Awareness (CDA), and the National Association of Health Underwriters (NAHU). The results reflect the cost objection faced by many producers: As premiums rise, employers in particular are having a tough time footing the bill. As a result, sales are declining -- but individual sales, say many, are thriving.
In fact, the decline of employer-provided insurance can be a benefit for producers when faced with a client base who will need to purchase coverage on their own because they're left out at the workplace.
The Health Study reveals these figures and more, along with the results of the health savings account portion of the survey -- figures which show that, while HSAs are often touted as the solution for many cost pain points, their popularity has hardly budged over the past couple of years.
The study also gauged producers' experience in the disability market. Those results will be featured in the August issue of the Agent's Sales Journal, along with a guide to overcoming the challenges found in selling such policies.
Along with this month's study results, the 2008 Health Insurance Selling Guide shows producers how they can take advantage of the individual market, sell to small businesses, and uncover niche markets. It also discusses the political aspect of the health market, with opinion pieces on the presidential candidates' health reform plans and the proposed expansions of the SCHIP programs.
And, the Guide to Health Savings Accounts gives readers an HSA primer and discusses creative pairings and communication techniques that can help boost those stagnant sales.
Deferred variable annuity rule postponed
In the February issue of the Agent's Sales Journal, Melody Juge wrote about Rule 2821, FINRA's attempt to better determine the suitability of all deferred variable annuity sales by requiring member firms to review the purchase within seven days of the customer signing the application.
This rule was originally set to take effect May 5, but FINRA was given until Aug. 4 earlier this year. Now, the rule has been pushed back once again until October or later.
In addition to the suitability review, the rule requires financial institutions to train all registered representatives on deferred variable annuities.
For more information, visit www.finra.org.
Sincerely,
Christina Pellett
Managing Editor
