LifeHealth.com
Protection products resonate with employees during tough times
by Marc Warrington
Marc Warrington is senior vice president of sales at Assurant Employee Benefits, Kansas City, Mo. He can be reached at marc.warrington@assurant.com.
Open benefits enrollment time is here. Traditionally, this time of year has presented a great opportunity for benefits brokers. Not only has it provided you the chance to help your clients build their benefits plans, it's also enabled you to increase your sales and put more money in your own pocket.
But in a year of unprecedented financial trouble in the U.S. and around the globe, you may be wondering if you'll still be able to sell new benefits to your employer clients. Clearly the current economy is a challenge, but if you focus on establishing the need for additional coverages and how they can benefit both a business and its employees, this benefits season can be a successful one for you and your clients.
In trying economic times, it stands to reason that the coverages most likely to appeal to employers (and employees) are those that offer the most financial protection. Health insurance certainly meets that description. It can offset the cost of routine medical care and, more importantly, protects insureds against catastrophic medical costs resulting from serious injuries or illnesses.
Disability insurance can replace a portion of income lost when an insured is unable to work due to an illness or injury, helping the individual to preserve his or her lifestyle. Life insurance can help protect a family's financial future in the event of an insured's death. Dental insurance benefits can help improve overall health in addition to oral health.
Discussing these benefits with employer clients can help you make your case for adding coverages to their plans. It's equally important to tell them how the coverages you sell can benefit them as well as their employees. For example, many employers may feel a need to continue to pay disabled employees who are unable to work, even though they may not have the financial resources to do so. Disability insurance can help remove the obligation they feel toward those individuals by placing the financial burden on an insurer. Similarly, improved employee health resulting from regular preventive dental care can translate to potential health insurance savings and reduced employee absences.
At a time when budgets are tighter than ever, even employers who understand the benefit of adding coverages may not feel they can afford to do so. Voluntary, or employee-paid, group insurance products provide a flexible and affordable alternative to employer-paid offerings when budgets don't allow employers to fund coverages themselves.
At a time when budgets are tighter than ever, even employers who understand the benefit of adding coverages may not feel they can afford to do so.
These coverages enable employees to purchase benefits they want at favorable group rates through payroll deduction. But when their paychecks are already being stretched thin by high fuel costs, rising grocery prices and perhaps even a significant increase in mortgage payments, will they be willing to pay for benefits offered in the workplace? If they see value in them they will and your goal is to make sure that they do.
Medical, disability and life insurance in particular offer the critical financial protection employees need. Facing an unexpected illness or injury without medical coverage can easily wipe out a person's financial assets. If that illness or injury leaves an individual unable to work, the situation can be even more devastating.
Research by CareerBuilder.com in 2007 indicated that 41 percent of respondents often or always live paycheck to paycheck. Without disability insurance, many individuals would quickly find themselves unable to pay for basic living expenses. That's a terrible situation to be in, for a young person just getting started in life and expecting to spend many years in the workforce or an older person struggling to fund both a child's college education and his or her own retirement. Neither can afford to be without the financial safety net that disability insurance can provide.
Nor can an individual afford to be without life insurance, although according to LIMRA International, one third of all American adults carry no coverage at all. Without considerable savings, the untimely death of a wage earner could leave a surviving spouse and children unable to maintain their lifestyle. Life insurance benefits can help them keep up with important expenses such as mortgage payments and school tuition and preserve a sense of normalcy in a time of loss. Term life insurance offered in the workplace provides a solution for employees who need to fill this gap in coverage, as it can be purchased on a guaranteed issue basis with no medical questions asked of timely applicants.
According to research released by LIMRA in 2003, employees consider dental coverage the most important employee benefit after medical insurance. While it may not be life changing from a financial protection standpoint, as medical, disability and life insurance can be, dental insurance offers value to employees with the potential for better health. Regular preventive dental care is the best way to avoid periodontal disease, which has been linked to serious health problems including heart disease, stroke and diabetes. People with dental insurance are more likely to see a dentist. A 2000 Surgeon General's report indicates that 70 percent of people with dental insurance receive regular preventive dental care, compared to only 51 percent of those without coverage.
Employees could not buy any of these coverages on their own for the same cost as group coverage. Employee-paid group benefits may be the only coverage available for employees who are ineligible to purchase individual insurance. When workers understand that, they are more likely to appreciate the opportunity to purchase desired protection in the workplace.
Ultimately, employees will have to decide for themselves which benefits they need most and what they can actually afford. In these shaky economic times, the benefits that offer the most value for their investment will likely be the preferred choices. If you focus on selling that value, first to employers and then to employees, this benefits season is likely to hold value for you as well.