Once in the bustling city of Toronto, there was a savvy business owner, let’s call her Anne, who sold jewellery.
Knowing the importance of providing the best benefits plan possible for her dedicated employees, but without an unlimited budget, Anne decided to look at some other options and see what was available in the market for their plan.
It just so happened that a couple days later (timing is everything), an insurance broker called and offered her a tempting discount.
Excited to save money for her small but growing business, Anne opted for a plan that seemed pretty much the same as the current plan, but a lot less expensive.
In fact, Anne didn’t even know that a discount was provided – she just thought this was her new price. And, for a while, it seemed like a great decision as she saw her monthly expenses decrease.
However, little did she know, this was the calm before the storm.
As the first renewal approached a year and a half or so later, the discount was eliminated in the proposed renewal, and the insurance premiums increased significantly – back to where the insurance company was recovering their funds from the discount.
Surprise, surprise – the insurance company didn’t want to continue losing money.
Anne found herself facing a tough situation, as the increased costs of the employee benefits plan were becoming a burden and there was little option to go back to market because they just moved and received a significant discount.
She had initially thought she was making a smart financial move, but it turned into a disastrous financial challenge.
All because she got the wrong advice and bought the cheapest option from and advisor who simply put premiums on a spreadsheet.
Faced with mounting expenses and the need to provide quality benefits for her employees, Anne had to reconsider her options.
Do we cut the benefits package?
Do we not invest in that new project or hire that amazing new talent?
Do we cut our personal and business income?
None of these are fun decisions to make – and they could have been easily avoided with proper analysis.
Anne learned the hard way that, sometimes, going for the lowest cost upfront might not be the best long-term strategy.
To try to remedy the situation and save her plan, Anne decided to reach out to Sphyra Benefits, a trusted benefits and insurance broker referred to them by a friend, to explore more sustainable solutions and find a plan that would better suit their needs and budget in the long run.
This experience taught Anne a valuable lesson about balancing cost savings with the need for reliable and affordable employee benefits.
In the end, she found a more suitable plan that ensured the well-being of her employees without putting undue strain on her business finances – but the effort, stress and work related to changing plans (twice) forced her to miss other business opportunities.
It was a reminder that, in the world of insurance and benefits, the cheapest option may not always be the wisest choice in the long term.
