Health Insurance Is the Next Real Estate for Entrepreneurs
Everyone knows real estate is a great equalizer for entry level entrepreneurs or sales people. In this article, I discuss why health insurance has leveled the playing field even more than real estate did.
Entrepreneurship is simply inserting risk between yourself and your profit goals. Having a job is risky enough. I heard Mark Cuban say having a job is like being self-employed with one client. I loved that, but back to the risk. If risk is between yourself and your profit goal, then surely the most pure form of individual entrepreneurship is being a commission-only sales person. Real estate has long been a highly sought out commission-only sales opportunity, and it is probably followed by "Financial Services."
Boy, do I hate the term "Financial Services." Everyone thinks of financial advisor, banker and life insurance at best. No one thinks of health insurance and Medicare, meanwhile businesses have stood up seemingly overnight to distribute massive amounts of health insurance and create billion dollar empires.
Let's take a look at the landscape of health insurance so you can understand what target audience I am referencing:
Group health insurance
Small Group 2-50 employees
Large Group 51+
Individual health insurance for non-Medicare eligible
Affordable Care Act plans
Short Term Medical
Indemnity health plans paired with large critical illness and accident policies
Medicare Supplement (also known as Medigap)
Medicare Advantage (comes in many different forms and is basically privatized Medicare options)
These are all sellable health insurance products with handsome lifetime values. Now, unlike real estate, life insurance and annuity commissions, there is a commission tied to long term happiness of the client. It isn't a lump sum, "bye, see ya later," type of deal. We love that aspect of it. We even sell with it.
"Mrs. Jones, the products we sell are only profitable for us if we are able to keep you for a client for quite some time. So, it is in my best interest to place you and keep you where you want to be."
It's beautiful and how all sales should be. It is also the reason many who can't see past their toes don't get into the space. They want the fast money, but the long-term money is always bigger than the fast money. The opportunity is also much greater.
With 11,000 a day turning 65 years old in the United States and many other variables leading to exodus of group plans into individual health, we have seen some amazing years in this industry. The residual side of it has allowed us to build a huge business that is extremely solvent.
So, why is it considered the new real estate, though. Why is it perhaps more of an equalizer than real estate?
We have a nation that is a melting pot of cultures. Many of those cultures are not as far along in passing down generational wealth. Certain demographics might have an easier time in real estate than others, since their circle may already have money to spend on lavish or larger real estate.
Health insurance is literally the opposite. People who are able to establish a standard for taking care of the least wealthy individuals in our nation are able to make the most money. Both in the Black and Latino markets, we have seen entrepreneurs enter this marketplace and have huge wins taking care of a market that may be warmer to them. They've built huge businesses. I'm in no way saying that it could not have been done in real estate, but that same market they were able to tap would not have been commonly buying expensive properties to make large commissions on.
Technology, starting with the telephone and ending most recently with rapid video transition social media, has led to more opportunity for people who didn't come from wealth. I would argue, though, that the level of opportunity involved with those who take the bull by the horns in health insurance and medicare is of greater magnitude to them than even those massive technological advances have had on their average benefactor.
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