Selling Health Insurance in 2012

So far there has been some interesting developments in selling health insurance post health care reform. Here are some pros and cons in selling insurance right now and in the future.


Pros


1. Because of the requirements of the Health Care Reform Law the rates for health insurance have gone up dramatically the last 6 months. We might have gotten a commission cut but we are making a smaller percentage of a larger premium.
2. Insurance companies can't cancel our clients' insurance anymore.
3. If insurance companies go over 10% of a rate increase they have to report that information to the Health and Human Services department.
4. Clients like the preventative on their plans quite a bit and the healthy clients that never go to the doctor finally feel like their getting something for their money especially on higher deductible plans like HSA's.
5. 80% of health insurance agents quit so that leaves a bigger market for those that are really good at selling.
6. Software companies like Norvax have quoting software in place that allows you the opportunity to quote life, dental, health, critical illness, and accident policies in the same quote. Now I am averaging 38% commission because we are selling multiple products at the same time.

Cons

1. We don't really have any money as a country to fund the Health Care Reform Law so the whole thing might go belly up. As long as we have ink to print paper money then they'll still probably have money in the system to fund health care reform.
2. It doesn't seem like Republicans are really putting forth a lot of effort to repeal the law. They've had plenty of time to do so which makes me wonder.....Are Republicans really against it?
3. If you're not highly engaged in selling and coachable you probably won't make much money selling health insurance. This is because there aren't a lot of new agents selling health insurance. They all got scared off so you're really playing with the big boys. That's ok because hopefully the content of this blog will help even the playing field. I have top agents across the country that are always looking at this blog for tips on how to become better.

Medicare leads

I was approached today by a gentleman that has been following the blog for some time with his brother. His question was what lead route should he go with when selling medicare supplements. We talked for some time about the new Facebook advertising. I highly recommend this type of advertising because it is the cheapest pay per click marketing campaign you can find and you can focus in on zip codes, age, gender, and even educational background. If you have a website and a Facebook account you can start right away. I have started using it for individual health and have been happy with the results.

I also recommended www.brokersweb.com. This is also a pay per click campaign for your website that has worked very effectively.

Is it still worth it to sell health insurance after Health Care Reform?

Hello Ethan - thank you for your wonderfully informative blog. I hope you can give me your insight as to how to proceed. I am new at selling health insurance but at this point I am wondering if it's worth it to invest any further time and money in this business.

I have been hearing that a lot of agents are feeling very discouraged. I don't want to invest any more time and money in something that might be taken from us in the NEAR future and by 2014. And diversifying is going to be very competitive. But maybe worth it.

As one experienced GA agent wrote (and many are feeling the same)
>>>I sometimes have trouble justifying the effort at current levels. If the comp cuts in half I will probably send them a link and wish them luck. ...
even if 75% of the agents bailed already this year, those who remain like us - for how long will we consider this business worth the return on investment of our time? it's getting ridiculously difficult to even put a sale together. Tell me, for the next three years if compensation is cut by say 50% is it worth staying in this biz? There comes a point where one either says no or yes to this ridiculous health insurance market...Deciding how much of my time and effort into a different direction. Come January, deciding my direction may come much easier..... >>>>>

Thank you!
Susan

Dear Susan,

I wasn't aware that so many agents were having a hard time with the business.? I have always believed that 90% of agents have NO CLUE how to run a business. Most are average to excellent sales people with charisma and work ethic but don't ever treat it like a business. I didn't either until I really studied people from Asian cultures on how they ran businesses. Most of these people save their money like crazy and really don't turn a profit the first 5 years while they are building clientele.

I think most insurance agents want to start making income right away. As you and I both know, revenue is different than profit. Until you are covering your debts and expenses you really aren't "making money". I think most of the people that are having a hard time are those that have over-leveraged their revenue by advances and lead costs to a point that they are really not making money; they are just spending their revenues and paying themselves on this.

My advice to you is this..........If you expect to start selling health insurance and making a profit right away you need to really have some reserves to get you through the first year. I would take some advice from some Asian business owners on how to start a successful business. Maybe go to a Chinese restaurant or something and talk to the owners.

Get your personal and business expenses low so that you can break a profit earlier. I like the quote from Brad Pitt in a movie that says "The things you own end up owning you." Stuff can make your life more complicated and harder to manage while you are starting out. I should know.....I used to have a driver drive me to appointments. Fascinating idea but in the end I could have sold more without him.

Get advice from a professional who specializes in analyzing businesses. I recommend Randy Russon. He is the one that has helped me and continues to help. My wife is a CPA but doesn't really know how to analyze my business so we go to Randy. You can find his contact information in this blog.

I would also recommend doing everything you can to increase your profitability by $5 a day. I have a person business coach that has helped me for over 4 years with goal setting and techniques that I would recommend. His website is www.performancegains.com. His name is Coach Bob and he is amazing.

Lastly.........If that is true, that 75% of agents might be quitting the industry, agents that can make it are going to make tons of money. I have been selling on average 3 policies per family. If you sell products like dental, vision, life, accident, and disability you have no worries even if they drop commissions down by 50%.

Ethan

Instructions to Import New Business clients to QB customers file (written for Quickbooks Premiere 2010)

Importing New Clients
• GETTING DATA INTO AN EXCEL FORMAT

This is obviously for a format used especially for Ethan Selph. By no means are these instructions able to work in every situation because your software program might be much different. I would strongly encourage getting a bookkeeper to do this for you or you can contact Randy Russon, his contact information is within this blog, and he can give you some tips on making this work for you.

1. Open the New Business commission statement.
2. Save the commission statement to the desktop.
3. Open the Able2Extract program from the desktop.
4. Click on the folder to open the commission statement - go to the desktop and find the file.
5. Click Edit, Select all pages in order to convert all pages at once.
6. Click the excel icon so that it will convert to excel.
7. When asked which option you prefer, click custom.
8. The commission statement should now appear like a grid with a bunch of lines.
9. The only section you care about is the “Advance on Issue” section. The other sections don’t matter at this point. You want to make sure the vertical lines are positioned correctly for each column in the “Advance on Issue” section. If they are not positioned correctly (meaning that date will be cut off or not put in the right column, you can move the line by right-clicking your mouse and moving the line). If there is an extra line that you need to delete—double click the right mouse. If you need to add an extra line, simply position the mouse where you want the line and click the right mouse once.
10. Once you have the vertical lines positioned correctly, click the excel icon again.
11. The data should convert to excel and pull up the converted excel spreadsheet.

• SORTING DATA IN EXCEL SO THAT YOU CAN IMPORT IT

1. As previously mentioned, the only information that you are currently concerned about is the information listed in the “Advance on Issue” section.
2. Delete all the rows above the “Advance on Issue” section and delete all the rows below the “Advance on Issue” section.
3. Highlight all the remaining information from the commission statement.
4. Click on Data, Sort.
5. Select the column for Writing Agent that is in the “Advance on Issue” section. (probably column E)
6. Delete all rows with information for agents other than your name
7. Delete any total rows.







• GETTING THE REMAINING INFO IN EXCEL READY TO IMPORT

1. Insert a column after Column B Policyholder.
2. Go to Data, Text to Columns.
3. Selected Delimted, Next, check the “Other” box and put a column in the box. Click next and then finish. You should now see the last name and first name in separate columns.
4. Insert another column after Column C (first name)
5. Go to a blank excel worksheet and type in the following formula:
=CONCATENATE(B4,”,”,C4,” “,A4).
6. Copy the above formula into the commission spreadsheet next to the first name of the first client. You should see the following information in that cell now LAST NAME, FIRST NAME, ID NUMBER.
7. Copy this formula down so that each row has the combined name and policy number.
8. This formula will combine the name and the policyholder into one column so that it will be easier to find in QB.
9. Once each line shows the combined data, select all the data in that column (except the header) for Column D. Right click the mouse and select Copy. Right click and select Paste Special and then select Values. Now in column D, you should see the same data as before, but it will be the actual data and not a formula.
10. Insert a column after column D and make a header called Contact. Type in the contact person for each policy.
11. Insert another new column after column F and call that column Start Date. Rename Column H Issue Date instead of New Business Period.
12. Copy the dates from Column H to Column G as well.
13. Delete the Writing Agent column
14. Insert 4 columns after the Premium column so that you have a blank column J. Call these new columns Job Description, Phone, Alt Phone, E-mail. Input the phone and email information if desired.
15. Delete all other columns except the amount of the commission advance.
16. After the commission advance column, add a column for Opening Balance As of Date. Copy the Issued Date into this column.
17. Select the data in the commission column (N). Right Click and select Format Cells. Change to general format instead of Accounting format.
18. Change the format in columns G, H, and O to a Date formal. Select the data, right click and select formal cells, select Date.

• Importing/Copying into QB

1. Go to Quickbooks and select Lists, Add/Edit Multiple List Entries.
2. Go to the first blank line at the bottom of this list.
3. Copy the data from the excel sheet (do not include column headers). Select the data in the excel spreadsheet and then go to the first blank line in the list in Quickbooks, right click and select paste.
4. Make sure all the information was pasted to the correct columns in QB. Make any error corrections in necessary. The commission advance should be in the Customer Balance column. This will show up as an opening balance invoice.
5. Click Save changes.

CONGRATULATIONS—THE DATA IS NOW IN QUICKBOOKS.

6.

• Final step for the weekly renewal reports – add the chargeback information to Quickbooks.

1. If there were any chargebacks on the commission statement that you imported, these will need to be posted as a payment to the customer account in order to clear out the balance.
2. In Quickbooks, Click on Home, then Click on Receive Payments in the Customer Section.
3. In the Received from box, type in the last name and find the correct policy.
4. The date should be the date of the report.
5. The amount is the “Advanced Commission” amount minus the “Earned Credit” amount. This amount is usually different from the chargeback amount listed due to timing differences of when AIO finds out about the chargeback.
6. In the “Deposit To” line, select the appropriate insurance company for the commission advance account.
7. Put “chargeback” in the memo line.
8. Click Save and Close. IF there is an overpayment, an alert will come up, simply click OK.

You can delete the report that you saved on the desktop. You no longer need it.

How to input renewal income into Quickbooks

Instructions – Inputting monthly renewal statement activity into Quickbooks

This is a step by step guide to entering your monthly renewal statement into quickbooks by exporting and importing. You need to get the "Able2Extract" program in order to do this and if you are just starting out you can do this manually. This is for Quickbooks 2010 Premier Edition. If you just don't want to have to deal with all of this I would encourage you to get someone to do it for you so you can show a payment history of each client and the balance they have with you. I would recommend Randy Russon for the job. You can find his contact information within this blog.


1. Go to your commission statements online.
2. Click on Commission Statements
3. Login to commission statement section.
4. Click on Renewal Statements.
5. Select the most recent renewal statement.
6. After the file opens as a pdf file, save the file to the desktop.
7. Open the Able2Extract Program.
8. Open the renewal statement file from the desktop.
9. Select Edit, Select All Pages
10. Click the excel icon and convert.
11. In the excel file, go to the very bottom of the document and delete any rows that have information on chargebacks. You will enter this information later, but don’t want it included with the renewal information.
12. Delete the header information at the top of the spreadsheet. Delete all rows above the Policy No./ Policyholder titles that start the beginning of the data.
13. Select the remaining data for the entire document so that it is highlighted.
14. Click on Data, Sort
15. Sort by Column D, Writing Agent.
16. Delete all rows for any agents other than Ethan Selph.
17. Open your Customers file in Quickbooks.
18. Hide all columns in Excel except for Policy No, Policyholder, Product, Earned Credit and Earned Commission.
19. For the amounts listed in the “Earned Credit” column you will need to input a payment into Quickbooks as follows:
20. In Quickbooks, Click on the Home window.
21. Click on Receive Payments.
22. Type in the last name in the Received From section until you find the correct client.
23. The amount is the amount listed in the Earned Credit column.
24. The date is the date of the report – for example 5/31/2010 for the 5/31/2010 renewal statement.
25. The deposit to line needs to be changed so that the payment is posted to the appropriate insurance company. Determine the product type from the excel spreadsheet either in the product column or after the name of the policyholder.
26. Click on Save and New and move on to the next payment following the same steps as above.
27. You may highlight or bold the information in the excel spreadsheet so that you remember which payments you have already input.
28. For the amounts listed in the “Earned Commission” column you will need to create an invoice and an immediate payment on the same day.
29. To create an invoice, go to Home and Create Invoice.
30. Select the Customer. If the customer is not in the system, add them to the system.
31. Select the class – product type.

How do I pick a good lead vendor?

Thanks for your response Ethan! Just to let you know I have been using the mojo dialer for a few months and its great. I wish there was just one program for everything but that's wishful thinking! My problem now is finding a good lead vendor. I started out with insuranceleads.com and it was okay and then for about a month everything started unraveling (i.e., my contact ration went from about 40% to 20%, a lot of incentive leads, people who never requested information, etc.) I have also used netquote and a couple of others and I have found that with shared leads price doesn't mean better quality. This is a journey I guess.

Esteban

Answer: I built up my leads database with Netquotes. You can get hosed pretty bad with them too. I would suggest before trying any lead vendor to go to their site and put your information in there with your phone number and see how many agents contact you. If you mess around with zip codes that a lead vendor might use you might find that you are only sharing with one other agent instead of 10. Also pay attention to how quickly agents call you so that you can determine if you are competing against a call center or a good ole' agent. I prefer competing against agents because they don't have a predictive dialer half the time. I would also work with MOJO to have your leads directly imported into their system. They can show you how to do this.


Ethan

When is a good time to call leads?

Hello Ethan,


I love your blog, keep up the good work. I have two questions for you. I am a new agent and I just started buying leads. So as not to wait around all day for leads when is usually a good time that leads start coming in or is it sporadic throughout the day? Also, do you do a lot of webinars when selling insurance online? It seems that some of the "experts" suggest you cannot sell successfully without selling via webinars. What are your thoughts. Thanks.

--
Cordially,
Esteban

Dear Esteban,

I don't think there is a perfect time to turn leads on and off. I think a lot of it depends on your situation and how many leads you are getting. If I were getting a few leads I would have them go to a smart phone or something and call them as soon as they come in if you are not in front of a computer all day long. I you have more than 10 leads a day coming in I would use an autodialer like MOJO or a call center like LEADPOD to make calls for you. These two services can help you make a much better return on your investment.

Lastly.........Don't let your business run you. You are the business owner and you need to run the business. If you aren't happy because you aren't doing what you love you will never be able to sell very much. I like to allocate so many hours a week prospecting, doing customer service, outside prospecting, and so forth. You have to figure out a formula that makes you happy. I would keep a time budget and keep track how your week is going to be divided up. Also there is nothing wrong with doing a business venturem like selling health insurance, part time until it out earns your other job. My rule of thumb has always been to not bite off more than I can chew!