Spotlight on Canadian Financial Authors:  Kimberly McLarty

In Canada’s 150th year, Knowledge Bureau is pleased to put the spotlight on Canadian Financial Authors and celebrate Financial Advice at the Crossroads of Change at DAC Nov 5-8 in Kelowna.  This week:  Kimberly McLarty discusses: Re-Evaluating Business Resources: A Group Insurance Specialist May Be of Help.

Your business-owner clients may not be getting the best advice when it comes to their group insurance plan. To help determine if they are working with a Group Insurance Specialist they need to ask their advisor a few questions:

Is their advisor truly independent?
Many advisors work only with a couple of insurance companies. This can be a problem for several reasons. Most insurance companies have their target markets that they like to work with and if their advisor is getting quotes from only two or three insurance companies, they may not be getting the plan that is best for their company.

Does their advisor negotiate their renewal?
Many advisors will accept the renewal rates presented to them by the insurance company without completing any review or negotiations. This can result in paying higher premiums than necessary, year after year. Insurance companies are in business to make a profit. It’s your clients’ advisors’ job to make sure their renewal rates are justified, and that they are receiving the best value for their premium dollars.

Are they working with a true group specialist?
Group insurance is one of the more complicated forms of insurance planning. Many advisors will tell your clients they are knowledgeable in group insurance. Make sure they ask them if they have any designations that are specifically group-insurance related. Suggest they speak with some of their existing advisor’s clients for references.

When was the last time your client’s advisor "went to market"?
Going to market refers to when an advisor requests quotes from several other insurance companies to ensure their client’s plan is competitively priced and that their expenses are in line with industry norm. Generally, this is done every three years.

Does your client know what their Target Loss Ratio (TLR) is?
The Target Loss Ratio (TLR) is the insurance company’s projected profit point of your extended health and dental care benefits. It is the maximum dollar amount of claims paid by the insurance carrier expressed as a percentage of their premium. Has your client’s current advisor let them know what their TLR is? Any claims more than the TLR will result in a premium increase at the annual renewal. For example:

If your company pays $10,000 of premium for your group extended health and your TLR is 78%, then only $7,800 out of your $10,000 paid premium is available to pay claims. The remaining $2,200 will go towards paying administration and fees, your advisor’s commission, and profit for the insurance company.

Special thanks to Kimberley McLarty who is President of Authentic Benefits Consulting and a Group Insurance Specialist. She has over 30 years of experience working in the employee benefits industry, and can assist advisors and their clients better understand their group insurance plan.  Visit www.authenticbenefitsconsulting.ca for more information.

©2017 Knowledge Bureau Inc. All Rights Reserved.

Refer a Friend	Research	Calculators	Course Trials