Tips from the Insurance Pros with Scott Zagurski
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Matt
Hello and welcome to Assurity’s podcast, “Tips from the Insurance Pros.” In this series we talk with industry experts as they share ideas and insights you can use today. I'm your host Matt, and I'm joined by our very own Scott Zagurski, senior director of marketing. Here at Assurity, we've recently made some exciting changes not only to our Century+ Disability Income Insurance, but our critical illness product as well. Scott's here to discuss the basics of those changes and the opportunities out there for producers to grow their DI and CI sales in the coming months. Scott, thank you for joining us.
Scott
Thanks Matt. Excited about the opportunity to talk about these two products this morning.
Matt
And we're excited you're here with us. Why don't you start by telling us a bit about your background?
Scott
Well Matt, I have been senior director of marketing here at Assurity for almost three years and I've really been proud of our company's growth – and not only just revenue, which has been great over the last several years, but also in our product development process. I think we're very proud that we're able to release not one, but several products each year. And I'm really excited about some of the changes to either old products or new products that we get to discuss here this morning. And before Assurity I spent the majority of my career in the insurance or financial services realm with about 16 years – I’m aging myself here – in insurance, prior to arriving at Assurity.
Matt:
Okay. Well how about we start with the disability protection. Scott, can you summarize the recent changes to our Century+ DI and the advantages that offers producers?
Scott
Sure. Our Century+ DI plan for disability insurance has been a staple for us at Assurity for a number of years. It's one of the things that I was really encouraged about when I was recruited to Assurity that this is a product that we're committed to. Disability insurance is one of those forgotten products in the industry. You have people that generally are specialized in health insurance, senior products, life insurance, and you have specialized shops that definitely have a passion for disability insurance – and we share that passion with those shops here at Assurity. Now for the changes to our Century+ DI: our product has been out there for several years. It's definitely served us well and serving our consumers well, but we knew it was time for some tweaks and changes. Disability insurance in general can be a little bit more of a difficult sale in the fact that it can take quite a while, several weeks to process business. How do we shorten the cycles on our product? When an agent actually submits an application and sits down with the consumer, how do we shorten that buying cycle? How do we shorten that application process? So we really looked at what can lengthen that cycle at Assurity. There are certain things that really do affect placement that we've been monitoring over the years in placing those applications and issuing policies. One of the things that comes up from time to time is the fact that you have to request people's W-2's – their financial background and information. And not everybody is easy with handing over their tax returns where it's readily available. And for the most part, we are looking for two years of W-2 forms for people who aren't self-employed and who were looking for a benefit of $3,000 a month, for coverage for disability insurance. While I'm looking at the numbers and looking at how many of those applications would drop-off due to just non-availability or gathering those documents, you know, we saw quite a drop-off there that affected placement. So we revisited that benefit amount, and I'm proud to announce that we've gone from $3,000 a month benefit for that requirement as a ceiling to now $4,000 a month for that requirement. That's a huge change for us. The average monthly benefit amount we issue here at Assurity is just under $3,000, and that's kind of the sweet spot for Assurity. We look at, instead of you know the doctor, we look at who's in the waiting room or who's helping them. As a nurse, we're looking at expanding that coverage because we know the importance of income protection and focusing on those occupation classes. They really need to protect their income the most. So we wanted to make sure that this process of getting a disability insurance policy from Assurity was as simple as possible. So that change, and also making sure that that change is available in the state of California. California, as you know, as far as population is a huge opportunity. And in the insurance industry we're regulated state by state, and some states just have different rules than others. California being one of them on the health insurance side – but we are very proud that we've looked at that state. We've looked at the rules and we're able to offer this not only in California but in New York, and in all 50 states that we serve as here at Assurity. So that's a huge milestone for us.
Matt
So now that we've talked about the advantages Century+ Disability Income Insurance offers, where do you think producers should look to grow their DI sales?
Scott
We look here at Assurity for simplifying the disability insurance sale, as we were just talking about. I think a lot of the industry sometimes can complicate the need. When you look at kind of the standard stats that get thrown around, you know that it's basically one in four people are going to become disabled before they retire or need this sort of product. We don't feel that those stats really resonate that well. We've been playing them for years and years. We've also seen different carriers and we've even been guilty of this ourselves – try to simplify the needs-based path by putting an acronym on it. You know, if it's “MUG” that some carriers you should have market, utilities and groceries as basic needs. We never feel, you know, when you look at the basic consumer and how the sales approach works, that really an acronym simplifies anything.
But we would agree with the first letter in that acronym that protecting your mortgage, keeping yourself and your family and your home, really does resonate well with people. And that's why this time of year is so important. The summer months, you know, starting when you get out of school in May to when they go back to school in August, is always prime selling and buying time in the housing market. For those producers that are out there, especially property and casualty producers that are looking at homeowners insurance, protecting that home past just the homeowner's part if something happens to the home. But if something happens to you and you can't work because of an illness or an accident, you don't really have that coverage on homeowners insurance. Offering disability insurance and just focusing on the mortgage, the amount of mortgage that they would need to protect, is a great way to get a sale and simplify this process for a consumer because they really do want to keep themselves and their family in their home. And ever since 2008 when the recession hit, people really do identify with the loss of income. Now, back then it wasn't for accident or illness, you know, back then it was because everybody was getting laid off, the economy was bad – but they really felt what that income meant. Foreclosures were real. That fear in a consumer's mind is real and we don't want to play upon fear. That's not what we're about here at Assurity, but we do know that keeping yourself in your home and how important that is to the family and the consumer, and giving tools and policies that can help do that. That's really what we are about here at Assurity. Another change that we're bringing to our Century+ product when we're looking at improving placement and making it easier for us to get more people coverage is one of the other stumbling blocks for people are medical exams in the insurance application process. Our ceiling for requiring exams used to be a $3,000 monthly benefit. We decided to level the playing field with the W-2 requirement, so we raised nonmedical limits to $4,000 for a monthly benefit amount for people age 50 and under. For ages 51 to 55 the limit is $2,000. For ages 56 to 60 it's $1,500. Now that doesn't mean we wouldn't have the ability to ask for exams – that red flag comes up on the application. Of course, by and large, if you're under those amounts for your age group, you’ll bypass the medical exam.
Matt
So Scott, what tools does Assurity have available to help producers prospect and close DI sales?
Scott
While I'm pretty proud of our work on that here in the last 12 months, one of the things we've done is we know that consumer preferences change all the time. They want to be able to self-educate on products, especially on something like disability insurance, and which they typically associate just with, you know, accidents and being in a wheelchair and being off of work. They also have no idea how much this product costs typically. So what we wanted to do is arm our brokers and agencies out there with tools that would be online, easily accessible and could even be branded for those agencies. So last year we started building a disability insurance quoter that we would put out there for any agency that would request it that's actively contracted here at Assurity. It would be set up in the fact that, yes, you enter your demographic information and your occupation. One of the things we're very proud of about the occupation part of this quarter is typically, you know, the quote systems that are out there will ask you, “Are you a 4A, 3A” – things that consumers really don't relate to; they don't know those terms. That becomes jargon very quickly. Or if you ask them if they're “technical” or “semi-technical,” they don't quite get that either. But if you just ask them what type of job do you do and they start typing in a couple letters and it automatically then pre-fills from a list, which right now we're over 10,000 occupations, then that makes it a lot easier just from the get-go. And for people who run these applications and know the term that we issued, “other than applied for” happens all the time because somebody might start as an occupation, they end up as a different grade. We take the occupation class out of it by just making either the agent or the consumer answer the simple question based on job title. So we've set up kind of that front-end process on demographics. It then does go into a needs tool. It asks for monthly expenses. Now, as an agent or consumer, they can bypass that and go straight to a quote from the benefit amount. But what we like about that is getting on the self-education – going through “what are the expenses that you would want to protect.” It allows that person to relate more on really what this product is really going to help them cover. And I think, again, when you just say the word “disability insurance,” you don't quite get that its income replacement sometimes. So allowing them to self-identify, go through that calculator, we feel, is a very important process. And then after they go through their expenses, it gives them a quote based on their expenses. There are a lot of places online where you can get a quote. There's a lot of places online where you can go through your expenses as a fact finder. There are very few places online for disability insurance that would tie those two things together. So we do that and we also allow either the agent or the consumer if they wanted to add additional riders or coverage and explain those things in a very simple, linear basis. So we rolled that out last year. If those are things that people listening are interested in, that are doing work with Assurity or would like to do work with Assurity in the future, feel free to reach out. You know, our contact info is all over our websites so you can't miss us. But after reviewing the quotes and the data and everything coming in over the last year, we wanted to simplify this process even more. And earlier we talked about, you know, mortgage and that being a trigger. And we all know life event triggers and buying a home and protecting the home. So we wanted to make that really be the focus of the sale. So in June we are rolling out just a mortgage-based quoter and it's going to be really simple. You put in your address and it actually goes out to Zillow, the real estate site, it pulls up the person's actual residence, a picture of their house. It has the amount of the house that is estimated by that website. And then we calculate what their mortgage would be. So then we know what that monthly amount would be that they would be looking to cover. We take that amount along with their, again, basic demographic information, because we'd have to know how old they are and what type of work they do and if they smoke or not. And we take just a few fields in just a few seconds and turn that into a quote. And again, we feel that simplifying the sale is the key to the sale. In the past I've worked for carriers and I won't name them, if you look me up on LinkedIn, you'll see one of them. But in the past I've worked for carriers that have been so desperate for the life insurance agent to combine life insurance with disability insurance. And for people who sell those two products they'll get, when I say mortality versus morbidity, and going through an application process is a different path for a consumer to take. So again, we're not looking to marry these things. We're also not gonna reject obviously any sales that we would get from a life insurance agent, because we know that's about half of the sales we get. But we also know that combining applications, lengthening processes, just makes it a lot harder for everybody involved. So we're looking at these paths in this mortgage quoter that we're putting out there to just look at protecting the mortgage in that life event trigger. How do I protect my home after I bought it? For those out there doing, you know, and working mortgage leads and use those as prospecting triggers, we really think we have something that could help them.
Matt
Let's shift gears to critical illness. Assurity rolled out its new CI product at the beginning of June. Scott, can you talk about the basics and why producers should add it to their portfolios?
Scott
Well, I think why critical illness is important ends up being a couple of things. You know, we talk about disability insurance, and some people based on occupation based on some other factors, may not even qualify for disability insurance. For a CI or critical insurance sale replacing a disability insurance sale, it can really help supplement those people who can't get coverage on disability insurance. One of the main factors in why people become disabled isn't just an accident. It's because they have a serious or chronic illness like a heart attack, like cancer, like a stroke, and these are things that critical illness policies have been covering for years. As we look at the critical illness market and we look at what's being sold today in the markeyt, the average amount of lump sum benefit is you know, about $22,000 to $25,000 and it's been that way for quite a while. And most of those sales come in, in a simplified process. And when we look at things like covering home, covering those expenses, we know that those are supplementary products. We know that they're kind of add-ons, but we also know that there is a need that's really changed over the last five that is making kind of that lump sum amount grow. And that need stems from high-deductible healthcare plans, high-deductible healthcare plans being offered to employer groups out there have really changed what lump sums mean to families and what deductibles mean to families. You know, before you would go and you know, you'd look at reaching your deductible and you'd be okay, $500, $1,000, you know, for a family. And you know, that would just be going to the doctor. Usually the family's bout with the flu once a year kind of took care of the deductible. But now on the high deductible side, you're looking at things that are $5,000 to $10,000 just for the deductible alone, not to mention all of the costs that would be associated with a chronic illness – you know, that would be covered by a critical illness plan. So at Assurity, we're looking at these changes in the market, we're looking that critical illness is a growing product definitely on the worksite side of the business and they're seeing that need coupled by people who sell health insurance, and we know there are a lot of individual producers out there that sell health insurance too. One-third of all employees in the United States right now work for small businesses or single-owner businesses that don't have the luxury of having group plans. They are serviced by a great network of independent health producers, and for those independent health producers at Assurity, we've seen great success in coupling those annual enrollments with critical illness, because it is a very affordable product, and it can help bridge that gap because once an illness like that strikes, it can be devastating to a family. It's sad to me, and it's even affected me here personally here lately, that we really do now live in a “GoFundMe” culture in which something tragic happens – it could be a death, it could be somebody battling with cancer – and you see the medical bills just add up. Besides that, if you're, you know, you're out of work, they don't have the income come in and you'll see a family friend put the GoFundMe page out on social media and hope that they reach their goal because they just don't have enough money coming in. They don't have this type of insurance to bridge the gap. And yeah, I, I say this because if you go out and do a search on GoFundMe, you'll see just the tens of thousands of cases that we're talking about. There has to be a better way. Now, I take solace in the fact that there are a lot of generous people out there. When it struck even my own family here in the last couple of weeks we had a tragedy strike and we had the GoFundMe page and yes, people just poured out, but we shouldn't have to rely on those things. You know, it's great that we have the generosity of others, but people don't like that uncertainty. People like the fact they can have peace of mind when they have these huge gaps of coverage and they're seeing how much month to month it just costs them for the healthcare insurance themselves. And people, because of all these expenses, the horrible part of the cycle is they're not getting their checkups as often – these preventative measures for these major illnesses – they're just not going the doctor as much because it costs them more out of pocket now. So this is kind of a vicious cycle. Now we're not saying that critical illness is going to solve this cycle, but it can be a safety net for those when this type of illness strikes that they could really get some help with. So I'm looking at those problems in the market and looking at producers that are already servicing the market. We knew again that we needed a very simple approach. We needed to look at our simplified critical illness product, which has been doing a great job in growth for us for a number of years, and how do we make it better? Let's not just rest on our laurels – how do we make that product better? One of the things we needed to do is increase that benefit amount on simplified critical illness that would not require a medical exam. We ask you the basic knockout questions and then process the application. So with our new product, we are raising that amount to $75,000. We feel that puts us right among the industry leaders in that type of product and process, because we want to keep things simple. The healthcare independent agents and brokers out there who are selling those products have enough to deal with. If they are going to sell this as a secondary or third product to their client base, it has to be really easy to do. But what if a person really needs more coverage? What if these chronic illnesses, which life insurance agents been putting riders on policies for years – what if you wanted a greater amount of coverage than just a simplified process? So we're also looking at one product that would have a fully underwritten path as well. Our process is going to be driven by one critical illness product that if you're $75,000 and under, you go through this simplified path, and now if you're over that amount, which now we are going to be able to issue upwards to a half a million dollars on this product, we can offer both coverages – an easy process for those people with the smaller benefit amounts and the full underwriting process for up to a half million. The great things that you've liked about our critical illness product in the past are still there. You know, we don't stop policies just because of a single diagnosis. We know that was a show-stopper for some of the paths that yes, if I have cancer and it recurs for a different reason or if then I have a heart attack a couple of years later, why wouldn't I just cancel my policy? We know that those coverages are still needed, and then it makes it almost impossible to get coverage if you just drop it after that. So we continue to offer that on our plan – a quick and easy process. And also in June, when we talked about kinds of quoters and tools and technology, we will also be providing a critical illness quoter in kind of the same realm as our other quoters we've offered in the past that allow agents to educate on these products because we feel education is just really important.
Matt
Well Scott, thanks for taking the time today to discuss the opportunities out there for CI and DI sales.
Scott
Matt, thanks for having me today. I'm really happy with all the listeners out there. You're giving our podcasts a chance and Assurity a chance. We are going to continue to look at improving our products and processes. So feel free to reach out and we'll see you next time.
Matt
And to our listeners, thanks for tuning into Assurity’s “Tips from the Insurance Pros.” To learn more about our disability income insurance portfolio, visit assuritydi.com. As for critical illness, you can find plenty of resources at criticaloutlook.com. You can also email us at podcast@assurity.com and we'll be happy to connect you with a representative in your region. Thank you for listening.
Disclaimer
For producer use only. Not for use with the general public. Not for use in New York. Assurity is a marketing name for the mutual holding company, Assurity Group Incorporated and its subsidiaries. Those subsidiaries include, but are not limited to, Assurity Life Insurance Company and Assurity Life Insurance Company of New York. Insurance products and services are offered by Assurity Life Insurance Company in all states except New York. In New York, insurance products and services are offered by Assurity Life Insurance Company of New York, Albany, New York. Product availability features and rates may vary by state.