Many business owner that are facing an increase in premiums might consider shopping their plan to a new provider. It is easy to fall for an enticing offer of a lower premium from another provider, which is not necessarily a bad thing. But how far does your dollar go inside a standard employee benefit plan? Are you really getting value for the money you are spending every year?
Many insurance providers will offer heavy discounts upfront to convince you to switch over to their plan. But at the end of the day every insurance company is in this game to make money. So if you are paying $10,000 in premiums, and you have $12,000 in claims, you could face a 30% premium increase the following year. Also you can pretty much guarantee a premium increase if you signed on for a below market value entry level deal.
So how far does your dollar go inside a standard employee benefit plan? If you are a small company, every dollar invested in an employee insurance plan will see a 30% administration fee, a cut for the agent’s commission and of course tax. The average insurance company will leave you with 70 cents from every dollar spent to go towards possible claims. So how do they recover their costs? By raising your premiums rates!
What is the solution then? Consider investing in a pooled benefit program, which gives wholesale buying power for small business benefits. Your business can’t be treated the same as a large multi-national corporation, a pooled benefit program will help stabilize premium increases and allow you to buy more benefits at cost effective rates.
Any agent that tries to entice you to switch plans based solely on the price, is only interested in the initial upfront commission, and not the long-term success of your employee benefits plan. A professional group insurance provider will take into account the specific needs of your business, market and industry before making a recommendation.
If you are wondering how far does your dollar go inside a standard employee benefit plan, and wondering how you can take advantage of our wholesale buying power, contact the experts at DENT Benefits!
The information in this material is derived from various sources. Material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources; however, no warranty can be made as to its accuracy or completeness. Before acting on any of the above, please contact us for benefit, pension and insurance advice based on your corporate or personal circumstances.