Historically, utilizing a multi-life sales strategy with three or more lives from the same business entity generated a premium discount off unisex rates from an array of individual disability insurance carriers. Unisex rates benefit female insured’s immensely as this pricing band delivers the same rates for both males and females.
It’s common knowledge that female rates for individual disability insurance are much higher than male rates. Data supporting House Bill 784 at The 189th General Court for the Commonwealth of Massachusetts revealed under some policies, women pay over 60% higher rates than men for the same coverage even though they perform the exact same duties under the same employer.
This pricing inequity leads to opportunity under the right circumstances. Let’s take a look at the case study below:
A female obstetrician approaches two brokerage outlets seeking advice on an income protection plan for her practice. Broker A illustrates a $10,000 monthly benefit with a $58.93 cost per hundred of insurance under the female pricing band. The total annual premium outlay is $5,893.00.
Broker B introduces a strategy that would provide the same exact coverage for this obstetrician, plus employer paid income protection coverage for two of her key employees. By moving from the female pricing band to the unisex pricing band, Broker B lowers the obstetrician’s cost per hundred of insurance from $58.93 to $36.43 and creates a $2,250 savings pool.
Broker B carves out $1,000 from this savings pool to cover the cost of the employer paid coverage for the two key employees. The obstetrician’s total premium outlay is now $4,643.00 and she has two very appreciative employees with income protection coverage.
That’s right, this obstetrician can acquire the same coverage, through the same carrier and provide two employees with income protection benefits at a lower premium outlay than Broker A proposed.
Which option do you think the obstetrician chose? This pricing strategy is also very effective when performing policy reviews with potential clients. There is nothing better than utilizing existing premium dollars to create savings and improve benefits.
Contact DIS today at 800.898.9641 or request a disability insurance quote here for assistance on your next case design.
