Group Health Agents...selling 'Ancilliary?'

[rousemark]

I would not recommend placing a cancer/indemnity plan premiums in a pre-tax Section 125, not worth the small savings. The IRS allows for tax-free receipt of the payment, but the individual needs to substantiate the actual medical expense. Think about the policy that pays an amount, say $50,000 upon diagnosis. May be tough to substantiate the full amount that soon.

Would say that is the reason that most cancer plans set up on section 125 are expense incurred plans and not lump sum..However, I do not do Payroll plans. I prefer to work one on one with folks.

 

[rousemark]

I've found that most group health agents don't focus selling ancillary or voluntary benefits. The fact that Aflac and Colonial are doing so well with career voluntary specialists is proof that most group health agents are not capitalising on this opportunity.

One reason that the group guys don't do ancillary is many of them do not like having to sell the employees one on one.. There is a lot of difference in the way most true group health plans and ancillary voluntary plans are sold..

 

[rousemark]

This page has some interesting statistics that go beyond the standard 1 in 2 males and 1 in 3 females which includes skin cancer.. According to the ACS, almost 40% of Americans will experience "invasive" cancer and 20% of Americans will die from cancer.. So, if you buy a cancer policy, your chances of having a serious claim is 4 out of 10.. Believe me, if you are one out of the four, you will not think cancer plans were a bad buy..
Lifetime Risk of Developing or Dying From Cancer

 

[sswords]

I would not recommend placing a cancer/indemnity plan premiums in a pre-tax Section 125, not worth the small savings. The IRS allows for tax-free receipt of the payment, but the individual needs to substantiate the actual medical expense. Think about the policy that pays an amount, say $50,000 upon diagnosis. May be tough to substantiate the full amount that soon.

 

[sswords]

Agree...to a degree. A lump sum cancer benefit like the one you describe often falls under a lump sum critical illness policy that my agency typically advises against pre-taxing for this reason. However, most stand alone cancer policies pay on treatment benefits which are easily justified making benefits non-taxable to the employee. Therefore, we recommend the treatment based benefits go under the 125 plan.