Speaker 1: 0:00

How can you scale your business if you can't scale yourself or if you don't wanna scale yourself? We'll find out on this episode of Shift Shapers.

Speaker 2: 0:10

Change either energizes or paralyzes. The choice is yours. This is the Shift Shapers podcast, bringing the employee benefits industry interviews with individuals and companies who are shaping the industry's shifts. And now here's your host, david Saltzman.

Speaker 1: 0:31

And joining us. To help answer that question is my old buddy, dave Tobin. Dave is president of Insight Insurance Services and a former group health advisor who can help us. So welcome Dave.

Speaker 3: 0:43

Thanks, david for having me on the show.

Speaker 1: 0:45

Our pleasure. Tell us a little bit briefly about your journey. We're always interested to find out how people ended up doing what they're doing.

Speaker 3: 0:51

Well, it's interesting. When I was five years old, my goal was to be an insurance agent.

Speaker 1: 0:55

I'm kidding Turn something so we can see your nose grow while you say that.

Speaker 3: 0:59

Yeah, yeah, there's Pinocchio here. I've been in the business about 27 years In the first 22, 23 years really focused in the group health market, more of the five to about 100 market, and it's a good business. The challenge was the ACA. The Obamacare changed it so much that about five years ago I made a decision to say, hey, I love my clients but I wanted to make a change into doing buy-sell, key person deferred comp, because it's something I've always done. It was just I didn't believe I could do it full-time and the light bulb came off about five years ago and so we decided to go full-time into doing buy-sell and key person deferred comp plans for business owners.

Speaker 1: 1:45

Had doing group health just stopped At a certain point. Did it just stop being fun?

Speaker 3: 1:50

Yeah, you just basically took the words out of my mouth. I mean it. You know we as benefit brokers we know the ins, the outs, the grinds and the daily BS and you know when you call up a client about health insurance they're about as interested as going to the dentist or getting a colonoscopy. It's just not a fun experience anymore and it just started to wear on us.

Speaker 1: 2:13

So you know we're going to talk about this in a couple of different contexts. For folks who are thinking that's not a part of the business, I want to be in, you don't have to. I want to be in, you don't have to. But it can still help you in a number of ways to increase the revenue into your practice and to create loyalty and stickiness with your clients. So let's talk a little bit first about what business continuation planning is. Can you give us kind of a brief intro 101?

Speaker 3: 2:38

Yeah, I mean business continuation planning is pretty simple. In fact. I was with a client a few weeks ago and one of the key things is it's a 50-year-old business and second generation. The dad passed away about 10 years ago and the son's pretty young, about 45, and his goal was to continue this business so he can do his heirs in the future.

Speaker 3: 3:02

And that's really as simple as what business continuation planning is is to be able to plan to make sure that if something catastrophic happens to an owner partner, that the business will continue, because with I mean David, you know, with no plan, nothing good is usually going to happen with it. And typically what we do is we sit down with a business owner and find out what the goals are, and in this case the client was about 43 and a $25 million company. If something happens to him, it's like which building does he start selling? How does it get passed down to the kids? And so we're looking at funding it with a $20 million life insurance policy to help the business continue and also pay for the good Uncle Sam estate tax that's coming up.

Speaker 1: 3:46

And there's also opportunities besides the life insurance, which, okay, some of our listeners might think okay, life insurance, that's not my jam there's also an aspect of funding for disability as well, isn't there?

Speaker 3: 3:58

Yeah, that's actually that's a good point. You have a greater chance of becoming disabled before you're 65 than you do of dying, and I've seen that firsthand with a lot of clients and friends and stuff. Disability is a key part of the buy-sell or the buyout with a business partner.

Speaker 1: 4:14

And that's you know. That's definitely something that the folks at now NABIP, formerly NAHU. Actually, when it first started it was a DI association Group. Health insurance hadn't been invented yet. It was almost 100 years ago. It was way before the end of the Second World War and there were a lot of DI dorks.

Speaker 1: 4:30

As a matter of fact, a couple of weeks from now, we're going to be joined by my old buddy, don Chimay, from the principal to talk about opportunities for folks to branch back into what used to be one of our core competencies.

Speaker 1: 4:43

But oftentimes I mean when I was doing buy-sell agreements I often found that I would knock on somebody's door, ask to review their agreement and say, you know, give me 15 minutes and a chair and let me look, and I knew what I was going to find.

Speaker 1: 4:57

I was going to find a buy-sell agreement that created the liability in case of a disability, but it never been funded because typically these are sold by life. Guys who don't do DI don't even think about DI. They think their DI is the world's shortest dirty word and you know, when I started, it was I brought guys in to work with, like you, which was the impetus for our conversation today. But as I got more competent with it, I thought, okay, I'm just going to show these folks that I'm the advisor they ought to be working with, because you know, your guy that you thought was such a hotshot covered you for life insurance, but you created a liability, an obligation. Where in the name of God are you going to meet that kind of an obligation if one of the principals gets disabled and it was a great way to say they're not taking care of all your risks? Do you find that often in your practice?

Speaker 3: 5:44

Yeah, yeah, for every 100 buy-sell agreements I review, there's probably five that are funded with disability insurance. So 95% have an unfunded liability that if something happens to one of the business partners, there's no money. And most business owners think that, well, the bank will help me out, They'll give me a loan. I'm like the bank is not going to give you any money. You just lost half your assets. The bank is not your friend. They're your friend when you don't need money, but when you need money you won't get it, and so that's a key thing is the disability buyout is rarely that I see in there.

Speaker 1: 6:18

So let's talk a little bit about the opportunities here for people who are health insurance advisors and want to stay health insurance advisors. Is it to learn about this? I mean, certainly that's one path, but there are folks who do what you do, who are open to referring them, bringing them in or vice versa. What are some examples of the way you've seen that work in your practice?

Speaker 3: 6:43

Well, one of the things I've seen in fact, the client I was just talking about is it was a benefits advisor that brought us in and that was outside of Nashville area.

Speaker 3: 6:51

About six months ago there was a client in Minnesota that was referred to us by a benefits advisor there, and it's really simple because I mean, I know health insurance really well, but I also know now that I don't want to do it, but I know the buy-sell and the key person in the deferred comp. It's as simple as doing a joint call, whether it's a Zoom or an in-person meeting, because the number one goal is to make sure that your client is taken care of. Probably the key thing I've seen is that we all have a hard time trusting people Because we've all been burnt by referring somebody to somebody, and so the trust between us and the benefit advisor or the referral partner is key, and that's our number one goal is to make the benefits advisor, the agency, look better than what they are and there's a decent paycheck at the end of the day if they want to do some revenue sharing on it, If you decide to go your own, though I want to be clear about this.

Speaker 1: 7:46

You know. If you decide to go your own though I want to be clear about this you mentioned that ACA was one of the reasons that, for you, doing group health insurance stopped being fun, started being more of a burden, etc. And you know you suffered the same problems that everybody else does. As the expectations on you as an advisor got greater in different areas, like compliance and things like that. You weren't being paid anymore, but folks were blowing up your phone with all kinds of questions. Even in this area, there's constant education. I mean, there was just a decision called Connolly that you know. If you were just doing this part-time and didn't really know your stuff, you might be in a whole world of hurt, or a client might be. What was Connolly all about? How'd that change things?

Speaker 3: 8:30

Well, the Connelly thing is something that we were tracking for the last 10, 12 years, but what happened was there's two brothers in Pennsylvania small manufacturing company I think it was worth about four or $5 million, and the old brother, thomas, passed away, and basically what happened was is that the value of his estate was over the estate limit and they had insurance. They actually bought life insurance. The problem was the corporation owned it, but they never followed their buy-sell agreement. It was supposed to be reviewed annually with an annual sort of certificate of agreed value, and that's when. So when the guy died, the IRS came knocking on the door and said, hey, you owe us more money because you never followed the agreement.

Speaker 3: 9:14

And the simple solution. So we have a client up in Minnesota I was just talking about, very similar, about a $15 million business. They bought insurance. The problem was the corporation owns the insurance, and that's where the problem with the Conley is and that's where we see a lot of these buy-sell agreements are funded. They're funded, but the insurance should be inside of each partner's name instead of the corporation. Now it gets complicated if you have a bunch of owners, but so those are the ins and outs of how do you set it up to make sure that the insurance doesn't get part of the, you know, part of the business value.

Speaker 1: 9:52

So there's still maybe not in the ERISA sense, but there's still a fiduciary responsibility on the part of the advisor, isn't there?

Speaker 3: 9:58

There is yeah and if you do it wrong it's a huge tax bill for you know, for the client.

Speaker 1: 10:04

And a huge lawyer bill for the advisor? I suspect yeah. So let's talk about this a little bit more and let's run some scenarios. So I'm primarily a health insurance advisor, but I need to grow my book. I don't want to get into all this buy sell gobble, do I'm not even really sure? I want to talk about the disability part of it. What do I do?

Speaker 3: 10:25

Well, there's two things you can do. You can try it or you can partner with an advisor like myself and we partner a lot with benefit advisors, cpas, other referrals but the number one goal is to take care of the client. The number two goal will be is to solidify the relationship. Know that the more that we solidify the relationship, the less chance that they're going to move their benefits book to somebody else. And so the kind of the process is pretty simple An introduction by the benefit advisor and then usually both of us will do an in-person call or a joint Zoom call and then we kind of take it from there. Or the benefits advisor can be they can be available as much as they want or do as little as they want, but we always keep, you know, our the benefit advisor up to date on everything.

Speaker 1: 11:18

Now my entree when I was doing that was asking people if they had recently had their buy sell agreements reviewed, and the reason that I went that direction was the reviewed, instead of getting into the weeds, was there's only really two answers yes and no, or we don't have a buy-sell agreement. What are you talking about In? Either case it gave me the opportunity to have an opening no-transcript.

Speaker 3: 11:58

Well, the conversation is cross-selling, so we all cross-sell everything, and the question you just brought up to a business owner. So, david, when was the last time that you reviewed your buy-sell? Most of them will say, ah, it's been 5, 10, 15 years, and so every 2, 3 years. Now you should really review your buy-sell agreement, especially with the Conley Supreme Court case. That is, and I don't mean to harp on it, but the Supreme Court voted unanimously 9 to nothing in favor of the IRS, and it was Justice Thomas that wrote the argument. That's why this is significant. So this is not just a little thing, but business owners really need to take a look at their buy-sell agreement, and the benefits advisor is a key player that can help their clients take care of that.

Speaker 1: 12:40

And now a word from our sponsor. You're not just an advisor, you're a game changer. Forget cookie-cutter off-the-shelf solutions. That's yesterday's news, it's 2025, and it's all about delivering bold, custom-crafted plans that truly make a difference. At the core is a razor-sharp self-insured framework, but the real magic that's in the high-impact point solutions you strategically layer in to slash costs and supercharged member outcomes. But let's be real, that's where the headaches start Hours wasted sifting through endless options, wrestling with integration issues and fighting data sharing roadblocks. It's a time suck and it's holding you back Not anymore.

Speaker 1: 13:27

Meet Benapower, the AI-powered game changer that builds killer plans in minutes, not hours. Benapower doesn't just curate the best point solutions. It makes them work together seamlessly, streamlining communication and driving collaboration like never before. With Benapower, you're armed with an end-to-end AI-enabled solution that makes you unstoppable. Spend less time piecing together a patchwork plan and more time selling your clients. Get unmatched ROI and you become the go-to advisor that everyone's talking about. Want to take your game to the next level? Visit benapowerai or schedule a demo at info at benapowercom. Find your power with Benapower. And now back to our conversation. So let's take another scenario. What if I'm a health insurance advisor primarily, and I want to dip my toe into this. How do I do that? What would you suggest?

Speaker 3: 14:42

I would suggest to get a good mentor, somebody that really knows us, because there's a lot of different things that are in and out. But really get a good mentor. Or we partner up with a lot of benefits advisors, you know, to help their clients and also help their cash flow, so we can do a revenue split with them as well.

Speaker 1: 14:56

So there is opportunity for splitting cases.

Speaker 3: 14:59

Yeah, yeah, in fact, the client up in past Nashville that we just saw, the advisor that brought us in, I mean this is a big, big life ticket about 20 million. They'll stand to make about $150,000 on it. I mean that's you know more than most of them. But we see a lot of benefit advisors that are able to make five to 10,000 bucks on their clients per client. So it's a legitimate opportunity for not doing much work, plus solidifying, plus solidifying their relationship Is there in most states to your knowledge.

Speaker 1: 15:30

I know you work in a few different states. In most states is there different licensure required beyond what I might have to have a health insurance license.

Speaker 3: 15:40

No, it's just a life and health license.

Speaker 1: 15:43

That's interesting. So it's a fairly simple way to get into kind of raising some more revenue for your firm and creating stickier client relationships. Do you have any stories that maybe you can tell us about how what you guys have done has reflected back in a positive way on the health insurance broker?

Speaker 3: 16:03

Yeah, I mean so the client that we were just talking about up in Nashville area. So that advisor has been a client or that client's been a client of the advisor for about 25 years and they've always tried to find a way of how do we solve that problem of if the owner dies, how does the business continue. And so the advisor had actually that brought us in, had started talking with some other advisors about it, but the other advisors didn't really look into the details. You know, like in health insurance, you really got to be into the weeds and that's where we come in especially well is on the buy, sell and the key person and the deferred comp.

Speaker 3: 16:43

So one of the key statements that the client made, he says gosh, we've met with two or three other advisors and this guy, dave Tobin, really sat down and explained this stuff in English. It was not big picture, not a lot of garbage and jargon and stuff, and that's one of the biggest problems is that I think we as professionals, we explain this stuff way too complicated, and so that's the goal is to keep it simple. That's one of the things I learned from you years ago.

Speaker 1: 17:14

Well, that's why I still have a marketing practice, because people tend to equate throwing a lot of information at a client with proving that, hey, I'm a real professional, I really understand this stuff. It's the old saw, you know. If I ask you what time it is, I want to know that. You know it's 10 minutes to 10. I don't want you to tell me how to build a watch. Maybe later on I want to learn how to build a watch, but right now I just want to know what time it is. You know, no-transcript Are there? If I wanted to kind of go more full tilt boogie into it. Not every life insurance carrier is really smart and good at, or even cares to do buy sell agreements. Same thing with not every DI carriers. Are there certain carriers that are better at this than others?

Speaker 3: 18:09

Oh, definitely. I mean there's over 500 different life insurance carriers but we probably have a handful of five to 10 that we work with on a daily basis. So, like Cincinnati, life is really really good If we don't have to go through the whole formulation of how much is your business worth to get a valuation. They will do a lot of issuing based upon what the business owner says it's worth up to a certain amount. We're like Prudential hands off man. You've got to get everything documented and stuff. So there's ins and outs and there's just carriers that are better at stuff, especially in the disability market. Principal is a great disability carrier. We do principal quite a bit on the disability market. You know principal is a great disability carrier. We do principal quite a bit on the disability end.

Speaker 1: 18:50

Yeah, you and I are both principal fans, probably because we both were in that part of the business and saw what they were capable of doing, and they also I don't know if they still do. They used to provide sample agreements and do an awful lot of the work that otherwise you'd have to spend a bunch of bucks significant money on your accountant and your attorney to do. They still do that kind of stuff.

Speaker 3: 19:07

Yeah, they do, and that's one of the reasons that we really like Principal and Pacific Life and National I mean just a lot of them because they provide that added value to us. In fact, sometimes they'll even get on the line with the CPA or the benefits advisor and the client at the same time and really go through some of the really detailed technical questions, because some of the stuff does get pretty deep into the weeds.

Speaker 1: 19:28

Yeah, you know, I also think one of the reasons that I wanted to have this conversation on the podcast was because, knowing your background and knowing the student that you are of the health benefits side of it, I think it's really important if you're an advisor and you're going to partner up with somebody whether it's, you know, just to do the occasional case, as we were talking about, or whether it's to have a mentor I think you really owe it to yourself and to your agency to find somebody who knows that side of the business as well, so they understand clearly what you're dealing with and, frankly, how to talk to the client, Because there are tripwires for those folks who've only dealt with clients with health insurance and if they hit one of those, they can blow up not only the sale but the client relationship.

Speaker 3: 20:12

Exactly, yeah, and I've seen that happen. I mean, you know. So there's, you know, the business owner doing health insurance and buy, sell and keepers, and it's two separate things. If you try to do both at once, you'll get, you'll lose both.

Speaker 1: 20:27

That's. You know. That's the old South Carolina thing you can't chase two rabbits, and we've seen that happen time and time again. So it's a simple question, isn't it? If you're a benefits advisor, the question of when did you last have your buy-sell agreement reviewed is a very simple opening, and you can either say, hey, I can help you with that, or I got a guy.

Speaker 3: 20:48

Exactly.

Speaker 1: 20:49

Yes, it's that easy, Well, and you know great place to end our conversation for today. I do want to say we'll have a link to some other information in the show notes. You can always, you know, contact Dave at Insight Insurance Services. We'll have a link again in the show notes. But, Dave, thanks so much for helping us understand where there might be some opportunities that maybe folks hadn't thought about before to both create stickier client relationships and to add some money to their bottom line.

Speaker 3: 21:16

David, thanks for having me. I appreciate it.

Speaker 1: 21:23

I want to give a quick shout out to our sponsor and our producer, hatcher Media. Hey, if you need podcast production or professional graphic design, josh Hatcher is the expert to contact For more information. Visit him at HatcherMedianet. That's H-A-T-C-H-E-R Media dot net.

Speaker 2: 21:41

This Shift Shapers podcast is copyrighted content and may not be reproduced in whole or in part without the express written permission of Shift Shapers Solutions LLC. Copyright 2024.