The Payment Plan can Make the Product

The Payment Plan can Make the Product

I was listening to a business news channel in my car the other day and a commentator was talking about the high price of the new iPhone, which was released a couple months ago. Admittedly, the broadcast was only moderately capturing my attention until the person on the radio said (and I’m paraphrasing here), “I don’t even know how much my iPhone costs because I pay for it monthly.”

It got me thinking about how powerful the payment plan can be. Of course credit cards and other forms of financing have been around forever, so payment plans aren’t anything new - yet it still it stuck with me. I was reminded that the payment plan for any product can add significant value to the sale.

I’ve always felt that the billing component of an insurance transaction was equally significant. Being able to create a highly desirable payment plan for the customer, one that would make it easier for a customer to justify and afford an expense, can make the difference between making or losing a sale.

“Core” to the system but not a “Core” consideration? NONSENSE!

Despite the value of the payment plan, when it comes to insurance, strangely the billing component is not a priority to many carriers. To be certain, Billing along with Policy and Claims, is considered part of the “core”, but Billing is usually treated as the distant third of the core components in terms of importance.

While carriers tend to spend a significant portion of their financial resources and time towards improving policy administration and claims, billing is too often considered just a back-office function and left alone despite having clear opportunities for improvement.  Look a little deeper, and one will find that even some of the newer "legacy replacement" systems that are purported to be flexible come up overly complex, expensive, and lacking in meaningful billing advancements. For carriers with older legacy systems, many sustain themselves with inflexible billing systems, or in some cases, no billing capability at all. 

A well thought out billing solution must provide customers with a cross-platform user portal that offers extensive functionality, including:

  • electronic payments
  • historical transactions
  • retrieval/viewing of invoices, cancellation notices, etc.
  • electronic customer service
  • management of communication preferences (i.e. paper/email statements, text or telephone reminders, etc.)

It should also provide cross-selling and marketing features that can increase revenue from agents and customers.


Although it seems to be a focus of every billing discussion, Billing doesn't only involve the policyholder. Billing can significantly enhance the agent experience as well.

Insurance agents depend on their commissions. When a premium is billed in installments, the agent commissions are usually paid as the premium is collected.

Ask a handful of agents today if they feel that the commission reporting they receive from their carrier is clear. I suspect most will tell you no.

Agents reasonably expect reliable funding of their commissions and clear reporting to accompany those payments. Add online access to individual accounts, pre-cancellation notifications, electronic payments, cancellation holds (to name a few) and you will engender relationships with your insurance agents that will make you a desirable market and sustain your business into the future.


Being a frequent customer touch-point also means that billing must be supported by a human customer support staff. Chatbots, artificial intelligence, email/text correspondence and automated telephone systems are important support mechanisms. However, live and professional customer support people that excel in first call resolution can distinguish a carrier from its competitors.


If you view billing only as a back-office function, you’re overlooking a key competitive differentiator that adds significant value to your company beyond pricing. Creating a spectacular billing offering for your customers is crucial. Having better billing will help you sell more product. It will help you strategically boost your customer satisfaction and consequently your customer retention. It will bolster your financial performance.

Make 2019 the year you commit to BETTER BILLING!!

Written By: Todd Greenbaum