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Overview

Voluntary benefits are taking on a new importance amidst the ever-changing landscape of health care reform. While they may have once been dismissed by agents and brokers with a full book of business as more trouble than they were worth, AmWINS’ Group Benefits division says voluntary benefits today are a sweetener that signals to existing clients you are working hard on their behalf, as well as a value-add that can close the deal with new customers. The Charlotte, N.C. –headquartered benefits distributor shares five reasons advisers should incorporate new voluntary options into their client proposals. [Images: Fotolia]
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1. Voluntary benefits work well for both fully and self-insured clients.

Whether employers opt for fully funded policies or choose to self-fund their health care, voluntary benefits are a way to fill in the gaps for employees who want to pay for benefits not provided in routine coverage. In addition, they can be particularly valuable in closing a deal for the best reinsurance pricing for self-funded clients, AmWINs says. Often, reinsurance carriers have a separate line of voluntary benefits, but carriers sometimes provide a discount for their reinsurance products if it means they can market their voluntary benefits to an employer’s workforce.
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2. Voluntary benefits are ideal for clients moving to defined contribution plans.

Many employers are switching to a defined contribution model that allows them to keep tight control on costs. Key to the success of this approach is offering a wide array of voluntary benefits that go beyond primary health care coverage, including dental, vision coverage and life insurance, or even lifestyle products such as pet insurance, gym membership, identity theft protection or legal advice. The richness of choices makes the transition easier, AmWINS suggests.
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3. Voluntary benefits are not just for large accounts.

At one time, carriers were only interested in selling these products to massive workforces, and only big employers had the resources to administer multiple benefit streams. In today’s competitive world, however, carriers are much more eager to enter markets that offer smaller opportunities, AmWINS says. In addition, third-party vendors with expertise in administering voluntary benefits are available for small employers.
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4. Voluntary benefits offer P&C producers new tools to generate and keep business.

As the current soft market undercuts commissions for agents in the property and casualty world, many are looking for ways to broaden their target audience. AmWINS’ Group Benefits Division suggests voluntary benefits could be another line to offer current clients, increasing commissions and “stickiness” — the propensity of clients to stay with an agent because of the increased value you bring and the multiple products you provide.
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5. Voluntary benefits are a foot in the door — and it had better be yours.

It is a small step from providing voluntary benefits to an employer to taking over their entire health care coverage. If someone else gets to your client with an offering for voluntary benefits before you do, you not only lose the opportunity to expand your business with them — you also may lose the client entirely, AmWINS cautions.
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