You've decided to shop for a group benefit plan for your company, you don't know what to look for and where to begin and that can be dangerous. If you don't know what you're looking for someone's going to tell you.
First things first, for most insurance providers at least most of the top providers, they will not send you a quote directly. If you email them or call them they are going to send your information to a broker. They're likely going to send your info to the broker who places the most business with that provider and not necessarily the best broker. So how do you find the best broker.
Find a broker you will trust to make decisions for your company
I find like with anything else, the best place to start is to ask another business that you respect and ask for suggestions. It's important that you deal with someone that you have a good feeling with and you trust, because you're going to want to take their advice and not second guess them.
Communicate what you need
Next you're going to need to explain to that broker what you're looking for. The first thing that I ask clients what their goals are for the coming years. As with anything else, be clear on what your goals and values are and how this new benefit plan is going to help you achieve them. Is there a specific employee that is a great fit with your company and if you had 20 more of them you would be a massive success? Well then it's important that your benefit package is going to attract that type of staff member.
Don't shop for price
This may seem counter-intuitive but if you just tell your broker to find you the lowest price, they're going to communicate that to the providers and then each one is going to be scrambling to be the lowest on the spreadsheet. Periodically on typically an annual basis the insurance companies will put you through what is referred to as a "renewal". At your renewal the insurance company recalculates the amount you're going to pay based on how much of the coverage you used vs how much they think you're going to use in the coming years. If they set their prices too low initially this can be a HUGE adjustment and it is not uncommon to see 40, 50, 60 or 120% renewal increases. How could you handle your business if next year your largest bills increased by that amount? At the end of the day over a 5 year period you're original price is irrelevant because typically it all gets made back in the end.
There is more than this that goes into finding a plan but these are the major areas where I see people make the most mistakes. At the end of the day, your broker works for you and will act on the requests you make of them. Make sure that you are asking them the right questions and being actively involved in the process.
Still have questions?
So we all know the path to creating wealth is to spend less money than we earn, correct? We also know that to control our weight we must consume less calories than we expend. So, if the solution is so simple why do so many of us struggle?
We struggle because we have failed to conquer the behavioral traps that trip us up.
Does this sound familiar? You wake up in the morning, jump on the scale in the bathroom, look at the number and immediately feel disheartened. You get to work and check your bank balance only to find that a payment you weren't expecting got pulled from your bank account and now you aren't quite sure how you're going to make it to the end of the month on your remaining account balance. Your boss comes in to your office and drops extra work on your desk and now you're starting to feel the stress.
So what do you do?
Lunch break rolls around and you head straight for the nearest fast food restaurant and get a big delicious burger. Or maybe you jump online and buy yourself a new outfit, something you'll look great in. That will make you feel better, right?
The answer is yes, it will, and therein lies the real problem. What was CAUSING you stress? You were stressing out about your finances and your weight. How did you solve it? By going to buy a hamburger or making an impulsive purchase.
Fast forward a few hours or maybe a day, now the good feelings you got from making that impulsive decision have worn off and now you feel guilty, guilty for spending money you didn't have and eating calories you didn't need.
The effect is a continual compounding of stress that grows and continues to weigh us down. It continues to push us further away from our goals and aspirations.
I truly believe that if we can learn to work with our behaviors we can gain control over our futures and permanently decrease our stress levels.
Enter behavioral finance. If we can work through the behaviors that are limiting our success, we can find the money to put our financial goals on track.
This isn't an overnight process, it takes commitment. But with the proper advisor, who's willing to work with you on what's holding you back you can truly achieve success.
Almost half of Canadian homeowners aren’t confident they’ll retire debt-free
What about you?
According to the most recent Manulife Bank survey, Most Canadian homeowners rank becoming debt-free a high priority, but only 51% are confident they’ll actually reach this goal.
It can be tough to juggle the financial responsibilities of owning a home and raising a family, while at the same time, trying to keep debt under control and save for your retirement years.
If you’re not confident you’ll be debt-free by retirement, there’s good news.
There are simple, time-tested debt-management strategies available that could help you become debt-free sooner.
As an advisor, I understand that discussing debt may be uncomfortable, but it’s a conversation critical to your long-term financial health. I can help you learn more about debt-retirement strategies and show you how an objective, customized plan could set you on the path toward debt-freedom.
If you’d like to discuss your debt-management plan further, give me a call or send me an email at:
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¹The Manulife Bank of Canada poll surveyed 2,132 Canadian homeowners in all provinces between ages 30 to 59 with household income of more than $50,000. The survey was conducted online by Research House between September 10-20, 2013. More survey results are available at manulifebank.ca/debtresearch
December 2013 Newsletter
November 2013 Newsletter
October 2013 Newsletter
Dean Chapman is a financial planner with an affinity for business.