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June 28, 2001 at 08:00 PM
Make Voluntary Product Features Meaningful To Employees
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Conventional wisdom is that voluntary products have to be simple.
Though true, the insurance industry should not use “keep it simple” as an excuse to take the value out of voluntary benefits. Its not necessarily the number of features or options that make a product confusing; its whether those features and choices are meaningful to the consumers who we want to buy them.
Id argue that a product that has the right features and options–those having relevance to consumers–will be far more successful than the product with the fewest features and options.
Consider how employees respond to voluntary insurance products at group enrollment meetings. Ive noticed they are typically much more insurance-savvy than industry professionals usually give them credit for. But they respond with confusion, questioning and loss of trust when presented with various product features or when asked to make choices that have no relationship to their own lives.
In a moment, well look at how to make features and choices more relevant to the lives of employees. But first, lets see how employees view some of the features that are common to todays products:
Take-aways: No matter how well intentioned certain features are–such as a rehab program or a return-to-work provision–many employees choose to interpret them as ways for the insurance company to get out of paying claims.
Reduced benefits: These are often seen as ways for a company to get out of paying the full benefit the employee has purchased. Examples include integrated disability benefits or services to gain Social Security claims approval.
Options with no relevance. When asked to choose options for which employees have little or no real-world basis for deciding, this creates major difficulty. One example is the option to select the duration of long-term care insurance benefits. What real basis–other than cost and perhaps some family history–does a 40-year-old have for deciding how long this benefit period should be?
For example, why not offer an LTC insurance benefit without a choice of benefit durations, as is the case with most long-term disability plans? The price might be higher. But too often, asking consumers to make irrational decisions creates confusion, which keeps them from buying the product at all.