Can a Business Use Disability and Life Insurance to Fund a Buy / Sell Agreement?
The DBL Center is your trusted resource for statutory disability benefits, like TDB in New Jersey and DBL in New York, that your clients need. But insurance brokers should also consider sharing the advantages of other types of coverage.
Key person insurance and business life insurance are critical products that many business owners overlook. Likewise, long-term disability insurance for executives and company owners can help the owner and their family financially survive a tragic event. These insurance benefits can also be used to fund a buy-sell agreement if ownership needs to be transferred to one or more of the partners.
What Is Key Person Insurance or Business Life Insurance?
Key person insurance is one of the many ancillary benefits DBL Center brokers can access to provide a full suite of coverage to their clients. Key person insurance, sometimes called business life insurance, protects the company’s financial well-being if a leader, whether that is a company founder, partner, or a top-level executive, dies or can no longer perform their job duties.
But if a business has multiple owners, the situation can become a bit more complicated.
What Is a Buy-Sell Agreement?
Often, business partnerships have an agreement in place to facilitate the sale of the company to one of the owners if something should happen to the other owner. In a buy-sell agreement, the owners will have the right (and, in some cases, will have an obligation) to purchase another owner’s shares if an owner dies or becomes disabled.
A buy-sell agreement can provide necessary income to the deceased or disabled owner’s estate. It also helps ensure the owner’s estate is compensated for the work, time, knowledge, and capital the owner invested in the business.
But what if the other partners don’t have the capital to purchase the owner’s share in the company?
That’s where key person insurance, business life insurance, or even long-term disability insurance for executives can come into play.
Any of these products can be used to fund a buy-sell agreement and transfer ownership of the company to the surviving, working partners.
Using Business Life Insurance or Long-term Disability to Fund a Buy-Sell Agreement
When the company uses business life insurance, the policy will be used to fund the purchase of the owner’s shares, paying out to the owner’s estate while giving surviving partners full ownership of the company.
A long-term disability policy can be used in the same way if the owner is still alive, but disabled and unable to perform their job duties any longer.
Using Life Insurance in a Cross-purchase Agreement
Alternatively, a cross-purchase agreement names each of the owners as beneficiaries on each other’s policies. This can get more complicated, according to an article that originally appeared in the Thomson Reuters’ Estate Planning Journal.
Rather than having a single policy covering the business, there must be life insurance policies for each of the owners, with the other owners named as beneficiaries. If there are three owners, you would write six life insurance policies, so that each party is a beneficiary for the others.
Help Your Clients Plan for an Uncertain Future with the Right Insurance
Having the right insurance protects not just individual employees and business owners, but the company as a whole.
By looking beyond statutory benefits like DBL and TDB, you can position your insurance brokerage as a trusted resource and consultant to your clients. Selling benefits like key person insurance, long-term disability, and executive life insurance not only helps boost your commissions, but helps give your clients peace-of-mind that their company is protected against any contingency.
Questions to Ask to Find Holes in Your Clients’ Insurance Coverage
As the statutory insurance industry prepares for July 1 renewals, it’s a good time for insurance brokers to help them identify gaps in coverage that may be filled by ancillary benefits.
The introduction of paid family and medical leave programs in a growing number of states opens new markets to statutory brokers. DBL Center brokers who specialize in short-term disability in New York and New Jersey understand what it’s like to roll out a new benefit program based on experience with New York PFL.
As such, you are uniquely qualified to help your clients with these new benefits in Massachusetts, Connecticut, and beyond. Plus, you have the advantage of the DBL Center’s proprietary Broker Dashboard: Net Revenue Tracker to keep your clients aware of renewals and pending cancellations.
Guiding Your Clients to Enhanced Benefits Packages
As you’re reviewing benefits for third quarter DBL and TDB renewals in July, take some time to ask your clients about their other employee benefits to identify holes in their coverage or areas – especially in regard to executive benefits packages, ancillary benefits, and long-term disability insurance (DI).
You can list some of the most common ancillary benefits and ask your clients if they offer these options to their employees. But it’s better to start a dialogue that discusses their needs.
Questions to Ask
You might start by asking about the demographics of their employees.
- Do they have mostly older workers who may be thinking about long-term care coverage?
- Do they have millennial and GenX employees who are anticipating braces for growing children on the horizon and need a good dental and vision package?
- Do they have Group Life / AD&D coverage that can help attract employees with families?
Then, move on to the specifics of today’s economy:
- Do their current short-term and long-term disability insurance packages meet their employees’ needs in these times of high inflation?
- Could stand-alone PFL benefits help New York employers save money on this statutory benefit?
- In light of PFL and FMLA laws, does the company offer enough in the way of benefits for employees who would never take advantage of these benefits?
- Can accident insurance and enriched DBL help provide more to employees who don’t have any need for family-related benefits?
Finally, look to the upper level of employees and the business, itself:
- What about the executives: Are top employees covered well enough in the event of illness or injury?
- Can the business survive the loss of key employees, either temporarily or permanently?
Once you’ve determined the make-up of the workforce and the business owner’s biggest concerns regarding the future of their business, you can make the best recommendations.
When Cost Is a Factor: How Much Insurance Coverage Can Your Clients Afford?
Of course, budgets are always a consideration when you’re optimizing employee benefits packages. It helps to remind clients that many benefits can be offered as completely voluntary and employee funded, funded by the employer, or on a cost-shared basis.
Having these options allows business owners to deliver competitive benefits without a dent in their bottom line. Even executive packages for life insurance and long-term disability can be written as buy-up coverage, fully funded by the executive with no cost to the company.
Using Paid Family and Medical Benefits as a Doorway to High-Commission Ancillary Benefits
Every quarter also brings new opportunities to write new business and expand your reach as an insurance broker. There is no easier way to get your foot in the door than with statutory benefits that every business owner needs to provide, by law.
DBL in New York and TDB in New Jersey have been on the books for decades. There are always new businesses entering the market in need of coverage. Plus, opportunities to privatize these benefits along with Family Leave Insurance in New Jersey and Paid Family Leave in New York opens doors for brokers.
It all starts with education about the products and presenting your insurance brokerage as an authoritative resource for statutory benefits. That’s where the DBL Center comes in as your back-office staff with the knowledge and experience to write Paid Family Leave in NY and other states now offering family and medical leave benefits.
From there, you can continue to ask the right questions to help benefits supervisors, HR directors and company owners develop the best benefits package to achieve their business goals. Disability insurance is just the beginning. Today’s workforce needs so much more in the way of insurance coverage.
When you pinpoint the holes in your clients’ coverage packages and show them ways they can affordably recruit and retain talent through the benefits today’s businesses and employees need most, they will rely on you as a trusted resource. The time to start is today.
Individual Life Insurance and Carve-Outs for Disability Can Help Your Clients Retain Top Execs
When we write group benefits, including statutory disability and ancillary benefits, we often showcase how insurance coverage like enriched DBL in New York can aid in recruiting and retaining new employees and middle management. But are your clients focused on their high performers, top-tier employees – and themselves, as the company owners? Individual life insurance, fully funded by the employer, and executive carve-outs for disability insurance, can give employers and top executive the coverage they need.
Are you helping your clients explore ways you can enhance their insurance coverage to benefit company owners and high-performing executives?
Starting Salaries are Higher Than Ever
College graduates are earning more than previous generations, and the salaries they command in this tight labor market may not seem commensurate with their experience in any given professional field. The National Association of Colleges and Employers survey lists starting salaries for 2022 college graduates at roughly $55,000, which is 2.5% higher than last year.
Think about this: Undergrads are leaving school expecting a starting salary of $85,000. And if they are going into petroleum engineering or another technical field, that expectation would not be wrong. Technical majors average $80,000 annually, in their first year of work, while petroleum engineers can pull in close to $88,000, according to statistics from ThinkImpact.com.
While salaries for executives and upper management have also increased, these upper-level employees are not receiving raises that put them in line with new graduate salaries. ZipRecruiter.com reports that the average corporate executive salary for 2022 is $82,180 a year.
Look to Individual Life Insurance Coverage and Executive Carve-Outs to Level the Playing Field
Insurance coverage like individual life and disability carve-outs for top-level executives and company owners can aid in employee retention and deliver peace-of-mind to a company’s highest performers.
By reducing monetary worries and stress, the right employee benefits can help foster a positive company culture and a more productive workforce – starting from the top, down.
What Are Executive Carve-Outs for Life Insurance Coverage and Disability?
As most insurance brokers know, typical group life / AD&D coverage delivers a term life policy for up to $50,000, either funded by the employer, paid for by the employee with pre-tax dollars, or offered on a cost-shared basis. The coverage is usually not portable, which means the policy ends if the employee leaves or retires. Any additional coverage beyond the $50,000, funded by the employer, is typically considered a taxable benefit.
However, employers can opt for an EE (executive employee) carve-out to cover high performing individuals, c-suite executives, and owners or partners in a company. These EE carve-out policies are fully funded by the employer and may also generate tax incentives and deductions for the employer. Your clients may not be aware of how this incentive can help them and top-tier employees in their company, while reducing their tax liability.
A universal or whole-life carve-out is typically portable, which means executives hold the policy after the leave. The policy will accumulate cash value, which means it can be part of an executive’s retirement strategy.
Long-term disability carve-outs function in the same way, delivering enhanced, portable benefits to top executives.
Are Executive Carve-Outs Different from Buy-Up Coverage?
Another option to offer your clients is Buy-Up coverage. Like EE carve-outs, buy-up coverage for life insurance can be offered as an incentive to top performers or a reward to employees who have stayed with your company for years. It can help long-time employees feel valued amidst an incoming workforce that is demanding higher salaries and better benefits can past generations.
Buy-up coverage is offered on a voluntary basis, however, and doesn’t cost the employer any money out-of-pocket. It’s typically reserved for executives and high-performers, and can help incentivize longevity within a company.
How Enriched DBL Benefits the Highest Paid Employees in a Company
Finally, New York business owners should consider enriching DBL benefits up to 60% of an executive’s salary. Especially in the face of an uncertain investing environment, where many experts are predicting a bear market on the horizon, executives want to know they can tap into other resources to replace their income in an emergency.
Having enriched short-term disability coverage in the event of a non-work-related accident or illness means they can let their investments sit, rather than selling in a down market, when it may be harder to recoup losses later.
The DBL Center Can Help
Finding the right insurance coverage for your clients requires asking the right questions and honing in on the challenges they may face recruiting or retaining c-suite executives and top-level managers. What are the company executives’ biggest financial fears? How can the right insurance coverage give them peace-of-mind and potential tax savings?
The DBL Center team can work with you to pinpoint the insurance coverage your clients want, from universal life to enriched DBL. Plus, we have the technology, through our Broker Dashboard: Net Revenue Tracker, to help you track renewals and cancellations and stay on top of your clients’ evolving needs. It’s never too late – or too early – to help your clients enhance coverage to retain employees and boost productivity.
Ancillary Benefits: Did You Know The DBL Center Offers These Benefits?
Our brokers have come to trust us for the lowest premium rates and white glove service when it comes to statutory benefits, including DBL in New York, TDB in New Jersey, TDI in Hawaii and, now, Paid Family and Medical Leave in the New England states.
But, through our long-term relationships with top-rated carriers, we also provide a variety of other benefits to assist not just employees, but executive employees and business owners. After all, when accident, illness, or injury strikes, financial hardship does not just affect middle management or hourly wage workers. The pandemic taught us a stark lesson. Financial misfortune can strike anyone, at any time.
For many executive level employees, the right group benefits and disability insurance can help them avoid tapping into retirement investments or high-yield investments for day-to-day expenses. Instead, they can pay low premiums over time and receive the money they need to maintain their standard of living or, in the case of business owners, meet overhead costs to stay in business.
Bundling these executive benefits with ancillary benefits for all workers is often an easy sell. The ones who benefit most from executive carve-outs for life and disability, key person insurance, and enhanced dental and vision benefits are also the decision makers when it comes to employee benefits. They will want to take advantage of the products that not only increase employee satisfaction, productivity, and retention, but also benefit themselves.
Take a look at seven areas The DBL Center can help you serve your customers with group life, enhanced disability, long-term disability and other ancillary benefits. Then give us a call so we can help you quote the lowest rates and appropriate coverage levels for your clients.
Carve-Outs for Individual Life and Disability
Hiring employees at any level is difficult right now. But your clients recognize that their most important employees are their moneymakers – the high-earners who bring in the business, generate the profitable ideas, and contribute to the DNA of the company and its brand.
Carve-out plans enable businesses to provide individual life insurance and disability coverage beyond what the organization’s group benefits provide. These benefits can help entice top talent to remain within your organization. There may also be tax advantages to executive carve-out plans.
Disability or Life Insurance to Fund Buy-Sell Agreements for Partnerships
Partners and co-owners within a business often have buy-sell agreements that stipulate terms in case one partner dies. But if a person should suffer a long-term disability, the buy-sell agreement may not cover that contingency.
A disability insurance policy that includes a buy-sell agreement can provide the funds for salary replacement in the case of short-term or long-term disability. It can also be used to buy out the business if the disability is deemed permanent. Executive partners and co-owners should consider enhancing their policy with these benefits to protect themselves, their family, and their income in the event of accident or illness.
Buy Up Coverage for Long Term Disability or Life Insurance
Buy-up coverage is similar to executive carve-outs, but can be offered on a voluntary basis to any high-income earners or executives. It is not for an elite group that the company owners may deem “irreplaceable,” but to any executive employee who wants to pay for the additional coverage.
Buy-up coverage could deliver as much as 66.67% of an employee’s earnings, up to a maximum benefit of $10,000 in some cases. Depending on the carrier and plan, these numbers may vary. Your DBL Center representative can help you find the plans that are best for your top employees, and they can be provided on a cost-share or completely voluntary (employee-funded) basis.
Business Overhead Insurance
Sole proprietors and small business owners face unique needs and challenges when it comes to their own health and mortality. Business overhead insurance, written as a rider to long-term disability benefits, can help pay a business owner’s expenses to keep the business running even if they are unable to work or an extended time period due to disability.
Key Person Insurance
Similar to executive carve-outs for the individuals who are most valuable to a company’s bottom line, key person insurance covers the business if something should happen to an owner, key executive, or top moneymaker.
If a business could not run, or would not be successful, without a certain individual, key person insurance protects the company if that person dies or becomes disabled. The company is named as the beneficiary of the insurance. Sometimes, this product is called “business life insurance,” as it protects your business in the event of the death of key personnel.
Long-Term Care Insurance
Long-term care insurance is becoming more popular than ever as people recognize the value of not having to rely on family members to care for them as they age. Long-term care insurance protects the employee or executive’s assets, and provides a daily amount of money for care should they become ill or disabled.
LTC can be offered as a group benefit, bundled with other ancillary benefits to keep premiums low. Like other benefits, it can be fully funded by the employer, funded by the employee on a voluntary basis, or the premium costs can be shared.
Individual Dental and Vision Coverage with No Waiting Period
When employers shop for dental and vision coverage, they want to know that they can work with their choice of providers locally. They want low deductibles, coverage for most services (including preventative treatments and regular check-ups) and no waiting period for new employees.
If you’d like to offer your clients these advantages with dental and vision coverage, The DBL Center can help. Thanks to our decades of carrier relationships and the ability to bundle ancillary benefits with short-term disability and other statutory benefits, we can help you write the policies that deliver what your clients want in today’s competitive business environment.
Reach out today for more information.
New York Disability Insurance and Voluntary Employee Benefits: The Workforce Retention Solution Your Clients Need
Is enriched New York disability insurance the way to keep high-level workers in tech, finance, and other competitive fields?
There’s a mass exodus of white-collar workers from a variety of fields, including finance and technology. What experts are calling the “Great Resignation” continues in spite of six figure salaries for investment bankers fresh out of college and employer accommodations such as flex-time and remote work for professionals in a variety of other industries.
Survey Finds Skilled Employees Leaving the Workforce En Masse
A new survey from HiBob, an HR/people management platform and Fiverr, an online freelancer marketplace, has revealed that it’s not just hourly wage workers who are jumping ship, either. Forty-six percent of HR professionals surveyed said that managers and directors are leaving, rather than entry-level workers.
“This leaves companies with a massive skills gap… They need to fill manager and director roles, ones that require years of experience and knowledge,” said Shany Malbin, general manager of Fiverr Business, in a GoBankingRates article.
The study went on to reveal that it takes, on average, as much as six months to hire new full-time employees. Coupled with the costs associated with recruiting and training new hires, it is in any business owners best interests to retain their in-house talent as long as possible.
But how can New York disability insurance and voluntary employee benefits make a difference?
Skilled Talent Turns to Freelance Gigs
The report revealed that 54% of HR professionals said many workers that resigned started their own business or decided to freelance. Workers are seeking flexibility, the ability to set their own hours, and work from anywhere. The DBL Center, which has excellent retention rates for our key employees, has offered as much flexibility as possible to our workers since 2004. “All I have done over the years is reinvested in technology to keep things current and safe from a security perspective, enabling my team to have continued flexibility,” said DBL Center President and CEO Michael Cohen.
Offering flexible hours, remote work, and perks like on-site childcare may help keep top employees. Statutory PFL in New York can also entice workers who are caregivers by giving them flexible, paid time off to care for children or their aging parents.
For many workers, statutory benefits like New York disability insurance, along with voluntary employee benefits and enriched DBL packages, could be another draw that keeps them employed. After all, freelancers in New York aren’t required to provide their own New York disability insurance and ancillary benefits are rarely available – or affordable – for self-employed individuals.
Why New York Disability Insurance Matters to Upper-Level Employees
Enriched DBL coverage tends to benefit executive-level employees and management as much, if not more, than it benefits other workers in an organization. Enriched DBL coverage enhances New York disability insurance to a cap of $850 per week. That’s not likely to cover all the monthly expenses of a six-figure, salaried employee – especially in New York. But coupled with accident insurance or critical illness insurance, it can help an ill or injured employee avoid tapping into their investments or rainy-day savings fund, offering peace-of-mind for the employee and their family.
“It takes 7.2 years to double income from investments at a rate of 10%,” explains DBL Center President and CEO Michael Cohen. “When employees have savings, it’s wise to keep it parked where it can grow.”
Similarly, ancillary benefits like vision, dental, and Group Life / AD&D offer tremendous value to employees who are likely to invest in regular vision and dental care, including braces for their kids.
How You Can Profit from the Great Resignation and Employee Retention Struggles
Insurance brokers are in a unique position to solve workforce retention challenges in a variety of industries, including finance and technology.
Spotlight New York disability insurance and voluntary employee benefits as a way to keep talented employees from taking the entrepreneurial route. Point out the cost savings employers will experience when they bundle statutory benefits like PFL and DBL with enriched DBL and ancillary benefits.
For business owners, enriching their employee benefits package will cost less than recruiting, hiring and training new talent. Productivity won’t suffer and they can focus on growing their business, knowing that their insurance broker is working in their best interests as a crucial part of theirteam
How to Fill your New York Disability Insurance Pipeline for the New Year
Smart New York disability insurance brokers have been thinking ahead to 2022 since the third quarter wrapped up. However, that’s not always easy to do as so much has changed in the past year. If you’ve been focused on the day-to-day, treading water and focused on maintaining your book of business without growing, that’s completely understandable.
But it could be time, as the new year approaches, to take a step back and take inventory of how you can grow in 2022.
As a successful New York disability insurance broker, you understand that keeping your pipeline full of leads and using consultative selling to earn the trust of clients and prospects, are keys to success. But how can you generate leads to fill your pipeline in this ever-changing, fast-paced world?
First, let The DBL Center be your back-office staff for managing the details. Follow our expert marketing tips for New York disability insurance, ancillary benefits like dental, vision, and group life/AD&D, and voluntary worksite benefits like accident insurance.
Take Inventory and Understand Your Market
As we prepare to enter the new year, take an internal inventory of your sales and marketing strategies. What has worked in the past?
- What stopped working for your brokerage in 2020 and 2021?
- What new strategies and tactics that you’ve noticed could be deployed by your team?
- How can you use technology to continue building relationships with your target market?
Most importantly, are you clear on the make-up of your target market? Only when you understand your audience can you adopt the appropriate strategies to fill your pipeline with leads.
Choose One or Two Marketing Strategies and Focus on Them
The digital era brings marketing strategies and tactics that New York disability insurance brokers haven’t previously embraced. If you’ve relied on sales calls, face-to-face meetings, and in-person networking to grow your book of business, it’s time to start looking at one-to-many (rather than one-to-one) tactics that can save you time and yield faster results.
Possibilities for digital marketing include:
- Inbound marketing through blog posts and social media content
- Organic Search Engine Optimization (SEO)
- Advertising through Google AdWords or paid social
- Email marketing campaigns for lead generation
- Webinars for one-to-many marketing
This can all seem overwhelming, especially if you haven’t done much digital marketing.
Choose one or two tactics that fit your company’s skillset, personality, brand and budget. Consider outsourcing some of these services if you don’t have the in-house staff to maintain momentum with content creation or don’t have the knowledge to spearhead a digital ad campaign on your own.
An outsourced digital marketing agency can deliver warm leads straight to your sales team, leaving your in-house brokers to seal the deal through consultative selling, white-glove service, and a deep understanding of the products.
Get Back to Basics with Follow-ups
It can take three to six months for a digital campaign to gain momentum, but you’ll want to be prepared when it does. Have a system to identify and follow-up on qualified leads.
When you do, consider your entire product line – not just New York disability insurance. The DBL Center works with preferred carriers to provide our clients with affordable options to upsell businesses on:
- Long-term disability coverage
- Group Life / AD&D
- Vision
- Dental
- Accident Insurance
- Critical Illness Coverage
You can save your clients money by bundling benefits, which can help them recruit and retain talent in today’s tight labor market. By making recommendations in a consultative capacity, you’ll become a valuable resource, working hand-in-hand with business owners and HR departments to help solve one of their biggest problems today: Keeping well-qualified employees happy.
Leverage Technology to Track Renewals and Cancellations
Of course, it costs less money to retain customers (and upsell additional employee benefits!) than it does to generate new leads and bring in new business. Both are equally important for business growth.
The DBL Center’s proprietary Broker Dashboard: Net Revenue Tracker gives you the tools you need to track renewals and cancellations, so you can stay in touch with your clients when they need you most.
Schedule your free demo of the Broker Dashboard today.
Voluntary Benefits at Work: The Antidote to “The Great Resignation”
In part one of our interview with Larry Estridge, The DBL Center’s new Regional VP of Group Voluntary Worksite Benefits, we talked about Estridge’s plans to work with DBL Center brokers to help them fill gaps in coverage and build loyalty with their clients through expanded voluntary employee benefits.
In part 2, we dig deep into why voluntary benefits at work are so crucial today as we face “The Great Resignation.” Record numbers of employees are quitting their jobs, according to recent reports, and there are more positions available than qualified employees willing to fill them. Additionally, nearly 2/3 of U.S. workers are currently looking for a new job.
Surprisingly, one study conducted by OnePoll on behalf of Motivosity suggested that “job satisfaction” is not the key reason people quit their jobs. Findings from other surveys found that the keys to retaining employees come down to a number of factors, including the employee’s culture fit within the company, their relationships with co-workers, and the sacrifices they’d have to make if they quit – such as losing voluntary benefits at work.
Estridge pointed out, “A person is less likely to go down the street to a company’s competitor for another couple of bucks if they know they have a strong benefit package where they are.”
For insurance brokers, The Great Resignation represents an opportunity to cross-sell voluntary employee benefits with statutory lines of coverage and help their customers recruit and retain top talent in tumultuous times.
In our last chat, we touched upon the broad variety of voluntary worksite benefits. Can you explain each product line in a bit more detail?
Larry Estridge: Let’s start with disability insurance – it replaces a portion of income, usually up to 60%, for on- and off-the-job accident and sickness.
Accident insurance pays a scheduled benefit for on-and-off the job accidents, such as burns, broken bones, ambulance rides, and emergency room coverage. It can also help with out-of-pocket costs such as deductibles and co-pays.
Critical illness insurances helps employees pay out-of-pocket costs at the time of diagnosis, for things like cancer, liver disease, heart disease, stroke. It’s paid in a lump sum benefit directly to the employee. It can be used for medical expenses, rent, mortgage, groceries, anything they deem important at the time. So, it gives an employee ease and flexibility.
Life insurance is another one of the more common voluntary benefits at work. It’s often used for funeral costs, final expenses, leaving behind money as part of their legacy.
Dental and vision coverage. Those two are self-explanatory and those are the two that are usually associated with voluntary benefits at work.
Why are these voluntary employee benefits so important from a recruiting and retention standpoint, especially during the labor shortage?
A person usually takes a job or a position with a company for the right career path, or they’re looking for a competitive or good salary. But what really keeps a person at a company, aside from the paycheck, is a strong benefits package. Voluntary benefits at work are a main part of the reason companies are able to recruit and retain employees. People are really looking ahead – especially in today’s times.
Do most companies typically go for employee-funded, employer-funded or shared costs?
Larry Estridge: I would say that varies. Most companies offer some group life / AD&D along with dental and vision paid for by the employer. They may provide some LTD or STD, but employees can then choose from different offerings such as critical illness, accident insurance and the like, or they can “buy up” on other offerings. These products can be extended to family members. Usually the cost is absorbed by the employee when they do that.
Many states are introducing Paid Leave, Paid Family Leave, and expanded disability benefits packages. With this coverage available through the state, why is it more important than ever for employers to provide a range of voluntary benefits at work?
Larry Estridge: Going back to these crazy times we live in, employees are becoming more aware of what their benefits are, and what they can and can’t do. Voluntary employee benefits basically allow them to have a choice, to have some control over what their benefit package will look like. Employees can choose what’s most important to them and their families.
Again, the most robust offerings are, the better the pool of employees the owner can recruit into the business. Trying to bring someone on board – or keep them from moving elsewhere – with a strong benefit package is exactly what businesses need to be doing to combat today’s high quit rates.
DBL Center: Blazing a Trail with Voluntary Benefits
Larry Estridge, DBL Center’s Regional VP of Group Worksite Benefits shares why disability insurance is just the beginning for our brokers…
Several years ago, The DBL Center redesigned its website and strategized a content marketing campaign to boost visibility and search engine rankings. Along with the new look and fresh content, our team came up with tagline “Disability insurance is just the beginning…”
The tagline spoke to the depth and breadth of The DBL Center’s product lines, including dental, vision, Group Life / AD&D and other ancillary benefits. In February 2017, New York State rolled out the most robust Paid Family Leave package our country had ever seen, and our tagline gained even more relevance.
This summer, The DBL Center brought on Larry Estridge, Regional Vice President of Group Worksite Benefits, to usher in a new era of expanded coverage for our brokers and their clients. His consultative sales approach fits in perfectly with the rest of The DBL Center team. He sat down with us to share his thoughts on voluntary worksite benefits, how these products can help new and current DBL Center brokers, and his future plans with The DBL Center.
Brokers have multiple options in voluntary benefits. What are some of the coverage lines available for DBL Center brokers?
Larry Estridge: Voluntary benefits can range anywhere from accident insurance, short term disability, long term disability, life insurance, critical illness, dental and vision.
Are certain voluntary benefits better suited for specific types of companies or specific demographics?
That’s an interesting question. In my experience, the size of the company really isn’t a trigger for the benefits. It starts with a conversation with the broker, and then a conversation between the broker and their client.
From our side, we help the broker start to determine what the employer’s needs are. Are there any gaps in their coverage? That’s where our expertise will come in.
We ask for a census to better understand the make up of the group. We also look and make sure added coverage makes sense. We don’t want to duplicate coverage. We just want to make sure the broker is doing the consulting they should be doing. We can help them look stronger – and increase their revenue and book of business – in an area where they might not have that expertise. That’s what we bring to the table.
Are there areas of coverage employers should look at to protect themselves, apart from providing coverage to their employees?
Larry Estridge: There are opportunities to look at executive carve-outs, which are things like income protection, disability insurance for executives, funding a buy-sell agreement for the partners, business overhead protection for business owners, key-personnel coverage is also important. These are benefits that are often overlooked because people don’t know to look for these things. We, at The DBL Center, offer this expertise to our brokers and their clients.
What would you tell brokers about the advantage of working with DBL Center for voluntary benefits packages?
Larry Estridge: For those already doing business with us, they already know who we are, what sets us apart, and how great our service is.
For those already doing business with us, they already know who we are, what sets us apart, and how great our service is. For those reading this who are not yet working with us, I want them to see and experience our strong service. We have a top-notch veteran team and access to some of the best carriers in the industry. In both cases, it’s a chance for cross-sell opportunities. The more products they can offer their clients, the more stickiness the broker will have. That means the client is less likely to move onto another broker.
Clients are more apt to stay when you have more lines. Customers are more dedicated to you. As long as the broker is doing their job, the clients aren’t looking to move, because you offer what they need. You don’t have to hear, “We moved someplace else because we didn’t know you offered that product.”
We can also offer more commissions to our brokers in some cases, because of our relationships with carriers. Our technology helps brokers work more efficiently. And, most importantly, they know we’re doing what we do best, and that allows them to concentrate on their area of expertise.
“Stickiness” is a word I haven’t heard in a while; we used it in the early days of social media. And it’s an appropriate term because it extends beyond customer loyalty. It means you’re the first option the customer considers and they “stick with you” longer – perhaps forever. Wouldn’t you agree?
Larry Estridge: Yes. It means customers are more dedicated to you. As long as the broker is doing their job, the clients aren’t looking to move.
In my more than 20 years of working with brokers, there have been times they’ve confessed that they lost someone because they came back and said their client didn’t know they had access to a specific product. And that’s sad. This is less likely to happen if you can have a conversation with a broker, and look over their business, and notice gaps… It’s a consultative approach and the client is less likely to move onto another broker.
Clients are more apt to stay when you have more lines. You don’t have to hear, “We moved someplace else because we didn’t know you offered that product.”
You mentioned earlier about not looking to duplicate coverage. Can you talk a little bit about that philosophy?
Larry Estridge: I always back off, rather than add duplication or unnecessary coverage. Forcing an unneeded benefit and losing a relationship because of that benefits no one! I know Mike and the team has that reputation of doing the right things and offering the right coverage at the right time. I’ve seen it in my short time here already.
It already sounds like you already fit right in with the team! What are some of your short- and long-term goals with The DBL Center?
Larry Estridge: Short term goals, I’d love to round out this fantastic team we have by growing the business for The DBL Center – bringing in new relationships I’ve nurtured for 20+ years and help them identify the selling opportunities with our carriers. I really want to establish us as a key player in the voluntary worksite and executive markets, so people see us growing and offering more.
From a long-term basis, I’d like to make us an industry standard in the voluntary benefits world, the way we already are with DBL, TDI, and Paid Family Leave. I want to make sure people know we are so much more than a DBL Center.
DBL Center Partners with Absence Management Firm to Assist Brokers
Absence management has become a crucial part of human resource management. For insurance brokers, absence management and leave administration represents our customers’ biggest pain points. HR directors and human capital management companies face more challenges than ever when it comes to tracking absenteeism, paid leave, and paid time off. Brokers who can help HR departments address these challenges can win their trust, loyalty and business forever.
Seeing the writing on the wall with Paid Sick Leave in New York and Paid Family and Medical Leave programs expanding across the country, the DBL Center sought to partner with an absence management firm to give our insurance brokers the tools they need to help their clients track employee time away from work.
The DBL Center is proud to announce its partnership with a top absence management company. “This new arrangement allows The DBL Center to complete the circle of service when it comes to comprehensive consulting surrounding leave administration in all required states,” says DBL Center President and CEO Michael Cohen.
What Is Absence Management?
Absence management refers to the added duty of HR directors to track employee leaves, reduce inaccurate or irrelevant claims, and stay in compliance with state and federal regulations regarding leaves. In some cases, companies may provide programs to help people return to work sooner or stay at work by modifying job duties or reducing the causes of disability.
Through our newest partnership, DBL Center brokers can provide their clients the value-added services of absence management and leave administration. These services will be specifically centered around the federal Family and Medical Leave Act, state-paid Paid Family Leave (PFL) in New York and PFML in Connecticut and Massachusetts, statutory benefits, short and long-term disability, voluntary and employer-sponsored benefits, and paid time off / sick leave.
How Can Outsourcing Leave Administration Help Your Clients?
In this era of remote work, tracking employee leave, paid time off, flex-time and absences that extend past the normal few days, such as for short-term disability, has become more complicated than ever. Through The DBL Center’s new partners, our brokers now have a single, centralized source to help HR directors track and administer all forms of leave. Our new partners can assist DBL Center brokers’ clients with the coordination, management, and adjudication of benefits. They can assist and review with claims, and also assist with payment preparation. By outsourcing these responsibilities to a firm with expertise in the area, HR departments can save time and money, reduce the time spent filing claims, reduce or eliminate inaccurate claims, and even ensure that employees receive their money faster to improve retention rates.
“This partnership fills the holes in our offerings, giving HR directors exactly what they need in these challenging times, when statutory benefits are changing quickly across the U.S. and people have more ways – and reasons – than ever to file for time off from work,” says Cohen.
The Broker Dashboard Helps Track Leave Administration
In addition to receiving the services of an expert absence management company, DBL Center brokers can track leave the administration of all policies through our proprietary Broker Dashboard: Net Revenue Tracker.
Brokers will receive bi-monthly reminders for cases that are in delinquent status for non-payment of premium or are pending renewal. Brokers can also use the dashboard to pinpoint opportunities for upsells of voluntary worksite benefits for customers that are only purchasing statutory plans.
Workplaces are changing and will continue to change as new benefits are introduced. Meanwhile, HR director’s responsibilities continue to grow. The DBL Center remains your one-stop, back-office staff for statutory and voluntary benefits, paid family and medical leave and now, absence management and leave administration, with tech-forward tools like Broker Dashboard to help you grow your book of business.
Learn more about how we can help you here: Net Revenue Tracker Broker Dashboard Preview
New Jersey TDB: State Proposes Wage Base Increase
Rates could rise, once again, for the premium cost of New Jersey TDB coverage. That means more opportunities than ever before for insurance brokers to build loyal customers and increase their book of business by showing companies how to privatize temporary disability benefits in New Jersey.
Here’s what we know so far:
The New Jersey Department of Labor has proposed to increase the taxable wage base for employer contributions from $36,200 in 2021 to $39,800 in 2022. The wage base for employee contributions to TDB and New Jersey’s Family Leave Insurance (FLI) benefit could jump from $138,200 this year to $151,900 in 2022, BloombergTax.com reported earlier this month.
Will New Jersey TDB Benefit Increases Follow?
New Jersey has not yet stated whether it will increase employee contributions beyond 47 cents on the dollar for either benefit, or if it will increase the benefit amount. Frequently, wage base increases and premium rate hikes are accompanied by benefit increases. As inflation has affected the price of goods and services across the board in 2021, we can be hopeful that a benefit increase announcement will follow. In 2021, New Jersey offered income replacement of up to 85% of a worker’s average weekly salary, capped at $903 per week.
Show Your Clients How They Can Join the Elite 2%
Regardless of the amount of the benefit for 2022, there’s never been a better time to show your clients the cost savings they can realize by privatizing New Jersey TDB. By New Jersey state law, a private benefits plan must offer coverage equal to or better than the state plan at rates equal to or lower than the state’s premiums. Yet, only 2% of New Jersey businesses take advantage of this benefit. We know the 2% is an elite number… your clients would love the opportunity to join their ranks and privatize TDB.
Especially now, as states face a labor shortage and are looking to entice workers through raises and enhanced benefits, privatized TDI and voluntary worksite benefits represent a great way to give workers more without spending more.
Plus, in addition to the cost savings realized by privatizing TDB, New Jersey business owners can eliminate waiting periods for claims payouts, select their choice of payment methods, and enjoy personalized service from the state.
How to Privatize New Jersey TDB
Since New Jersey waived the signature requirement for employees to “opt-in” to a private plan, it’s never been easier to privatize TDB. You’ll just need your client to obtain their AC174.1 from the Department of Labor website and send it to us.
Find instructions to obtain an AC-174.1 form here.
Once The DBL Center team has that information, we do it all from there, including shopping the plan to find the lowest rates and offering white glove service every step of the way.
Sweeten the Deal with Voluntary Worksite Benefits Options
While you don’t need to bundle New Jersey TDB with ancillary benefits to switch to a private plan, it may help your customers save even more money. DBL Center’s experienced staff can help you write the best policies for voluntary worksite benefits and ancillary benefits that include:
- Accident insurance
- Critical Illness Insurance
- Group Life / AD&D
- Vision and Dental Coverage
Employers can even customize plans to fit their workforce needs and demographics.
What’s to Come In 2022?
There’s a lot of uncertainty surrounding 2022 and what steps business owners will take to stay competitive in such a tight labor market. In all scenarios, there’s little doubt they will look to their trusted insurance brokers to provide the benefits their employees and job candidates need and want.
If premium rates rise in lockstep with inflation, business owners will be looking to save money on premiums while offering their employees value-added benefits that can give them financial peace-of-mind.
The DBL Center is here to help you keep pace with changing times and deliver low rates from trusted carriers on New Jersey TDB, voluntary worksite benefits, and more.
It’s time to start letting the 98% of business owners who are still writing their New Jersey TDB policies with the state that there is a better way.