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Selling through employers

I always thought selling insurance to people through their employers was the flimsiest of propositions - why would anyone talk to you about insurance in the work café, with their mates hanging around for the ‘convenience' of paying for the same thing they can buy in the plush, private, offices of the bank for the same price?

Friday, January 13th 2012, 9:47AM 1 Comment

by Russell Hutchinson

But in many markets, the UK, the US, to name just two, employer-facilitated (voluntary group) insurance is a big market. So why does it work? For employees it works because you reach them at one of the moments when they are thinking about financial matters more seriously than they usually do: at the time when they are hired, just after a raise, or when the payroll officer suggests to them that it is a good idea. That immediately puts them in a better frame of mind to discuss insurance. Placing an insurance discussion in the same context as their salary payment immediately helps them to remember what's at stake - their ability to earn. They can't earn if they are dead, disabled, or sick for too long - so the ground is prepared. They like the idea of paying out of salary because it means 'don't see it, so don't miss it.'

For employers there are some good financial reasons why they should prepare the ground for you. Southern Cross got some research done by TNS a little while ago which showed that time off was reduced when employees have private medical insurance - why? Because they do not wait to seek treatment, and with many conditions early intervention is the key. Then there is the matter of a disabled employee - often the employer faces strong moral pressure to keep a job open for a member of staff who is disabled without knowing when, or even whether, they will return. If employees have good personal cover they won't need to lean on the employer - who can then make a straightforward business decision when sick-leave runs out, and do the right thing for the business, because years before they did the right thing by encouraging the employee to take disability insurance. It works best of all if the proprietor, general manager, or team leader, stands up and introduces your initial presentation. Being older and having a little more money they say that they have disability insurance, medical cover, and some life insurance and every sensible person should do the same. If you are exceptionally lucky they may have some personal experience of its value from family, friends, or employees. With the HR team you've negotiated a 15 minute appointment in work time with each employee. You have limited objectives - just to sell the concept and fact-find sufficient information to make a more detailed presentation in non-work time to the employee and their spouse or partner.

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Comments from our readers

On 23 January 2012 at 1:04 pm denis said:
Russell, the drawback here is that using your example the employer won't be privvy to the terms of an individual's personal disability cover. The employer may well facilitate the premium payment from payroll - but that doesn't give them any right to know what that the cover actually is.

Group insurance cover, where the employer pays the premium and sets up the policy, is a different story. On that basis, the employer can cover themselves against a long-term sick employee and arrange for the employee's benefit to be paid directly by the insurer after, say, 6 months.

I think having a basic insurance benefit in place for all employees set up by the employer is the best approach. Medical underwriting is usually a lot easier too. You are then telling the employees about a new benefit that they immediately qualify for just by being at that workplace.

The individual sales will come from those that acknowledge that the employer's cover is nice to have, but perhaps not enough. When people leave the employer, they can also continue the cover with an individual policy.

You also elevate the relationship with the employer and the workforce beyond being the insurance salesman that roams around smoko rooms.
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AMP Home Loans LVR <80% - - 5.85 6.29
ANZ 6.74 6.15 6.49 6.49
ANZ LVR > 90 6.74 6.65 6.99 6.99
ANZ Special - 5.75 5.99 -
ASB Bank 6.75 6.09 6.40 6.65
ASB Bank Special - - 5.99 6.19
BankDirect 6.75 6.09 6.99 6.65
BankDirect Special - - 5.99 6.19
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Lender Flt 1yr 2yr 3yr
BNZ - GlobalPlus 6.74 5.99 6.39 6.59
BNZ - Mortgage One 7.15 - - -
BNZ - Rapid Repay 6.74 - - -
BNZ - Std, FlyBuys 6.74 5.99 6.39 6.59
BNZ - TotalMoney 6.74 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.45 5.90 6.50 -
Credit Union North 6.45 - - -
Credit Union South 5.75 - - -
eMortgage 6.04 6.15 6.69 7.19
Finance Direct 6.10 6.45 6.69 7.10
Lender Flt 1yr 2yr 3yr
First Credit Union 6.45 - - -
General Finance 5.95 6.25 6.50 7.10
HBS Bank 6.15 5.85 5.99 6.19
HBS Special - - - 5.89
Heartland 6.70 7.00 7.25 7.85
Heretaunga Building Society 6.70 6.00 6.50 -
Housing NZ Corp 6.74 5.99 6.39 6.59
HSBC Premier 6.84 5.95 5.95 6.39
HSBC Premier LVR > 80% - 5.75 5.75 5.75
HSBC Special - - - -
ICBC 6.75 5.99 6.39 -
Lender Flt 1yr 2yr 3yr
Kiwibank 6.65 5.79 6.39 6.65
Kiwibank - Capped 5.65 6.50 - -
Kiwibank - Offset 6.55 - - -
Kiwibank LVR > 80% - - 5.89 6.19
Liberty - - - -
Napier Building Society 5.80 6.00 6.70 -
Nelson Building Society 6.95 6.15 6.60 -
NZ Home Loans 6.85 6.09 6.40 6.65
Perpetual Trust 7.70 - - -
Resimac 6.59 6.35 6.58 6.77
SBS Bank 6.15 5.85 5.99 6.19
Lender Flt 1yr 2yr 3yr
SBS Bank Special - - - 5.89
Silver Fern 5.95 6.10 6.55 7.05
Sovereign 6.85 6.09 6.40 6.65
Sovereign Special - - - 6.19
The Co-operative Bank 6.70 5.95 5.99 6.19
TSB Bank 6.74 5.95 6.19 6.30
TSB Special - - 5.79 -
Wairarapa Building Society 6.20 5.75 5.95 -
Westpac 6.59 6.09 6.39 6.65
Westpac - Capped rates - 6.74 6.99 -
Westpac - Offset 6.59 - - -
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Westpac Special - - 5.99 6.19
Median 6.70 6.00 6.39 6.57

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