Worksite Products Play Important Role For Employers And Employees
Employees and employers both benefit from worksite market products, says Ronald Graves, managing general agent with Comprehensive Integrated Marketing Services in San Antonio, Texas. To convey the benefits of these products, he uses a weekend softball game as an example.
Supplemental medical coverage purchased at the worksite makes a difference to the hourly wage earner who “gets hurt on the weekend and doesn’t get paid” because he cannot function on the job. It enables a worker to receive a continuous stream of income, he says.
Without that insurance, an employee may show up at work rather than lose a paycheck, he adds. The employee cannot take the time off to heal and the employer is not getting a productive employee, so “it is not doing anyone any good,” Graves explains.
And, he adds, if there is a crisis and there aren’t adequate funds, the employee may come to the employer and ask to borrow money or approach the credit union for funds.
The employer is offering the average worker a real benefit, Graves continues, because with the focus on the upper income market, “the blue collar employee is really being left out of the market.” And, he adds, “blue collar employees realize that they are living payday to payday. They see a need.”
Graves says that typically, when visiting a worksite, he keeps the message short and simple by limiting discussion of products to two or three lines and a presentation to approximately 20 minutes. If employees want more information, he explains, they can speak with him individually.
This one-on-one is important, he continues, because an employee may have personal questions that need an answer. For example, an employee might want to find out if a spouse with cancer will be covered by a supplemental medical policy.
Executives at carriers including American Family Life Assurance Company of Columbus in Columbus, Ga.; Mutual of Omaha Insurance Company in Omaha, Neb.; and Prudential Insurance Company of America in Newark, N.J., are also touting the importance of worksite market insurance sales.
They note that reaching employees may be one way to penetrate a market that is underinsured. LIMRA International, Hartford, Conn., estimates that 47% of U.S. citizens do not have life insurance.
These carriers say that in addition to providing needed coverage, worksite insurance also offers employers some important benefits.
Anne Bossi, president of group operations with Prudential, notes the importance of worksite products to the average worker. The affluent market still prefers individual insurance but the middle income market buys insurance through the worksite, she says.
Consequently, these products can help companies retain employees in a way that does not cost them money, Bossi adds.
In order to do this, it is necessary to understand the benefits that are offered to employees in that firm’s industry, according to Bossi. And a broker or agent also needs to understand the culture of an employer and what a company’s employee benefits goals are, she adds.
Product offerings need to be robust, with a reasonable number of options in each product category so employees do not become confused, Bossi says.
Both short- and long-term disability are products that are popular in the worksite market and long-term care insurance will become more popular, she adds.
While the growth in the LTC market has been largely in individual sales, that is due mostly to the older ages at which the product is purchased, according to Bossi. As working baby boomers start to buy LTC, worksite sales will become more prevalent, she says, adding that any future tax incentives will speed that change.
At AFLAC, says Warren Steele, a senior vice president, the big sellers are accident and health, cancer insurance, short-term disability and dental insurance.
When an AFLAC agent is there to explain a product, he continues, sales penetration is around 40% compared with 10%-20% when no agent is there to answer questions.
What has also made a difference in reaching employees, Steele says, is brand name recognition. Employees relate to AFLAC’s signature duck, he adds.
“With any type of insurance there tends to be a wall,” he says. Advertising “brings down the wall and makes the field force more human and approachable.”
What will also bring down walls and enable insurers to reach employees is the perception of real value, these executives suggest.
If you really care about employees you want to make sure that you offer something valuable, says Marc Lower, vice president of worksite marketing with Mutual of Omaha.
For instance, he says there is a real need for DI, medical supplement and dental insurance products. He cites the escalating cost of health care as a main reason why these products bring value to an employee.
Lower says employers are encouraged to make sure that employees respond to a worksite offering, citing potential liability. If, for example, DI is offered, employees should provide written acknowledgement that they had the opportunity to accept coverage.
If an employee declines coverage and then becomes disabled, the employer has a record the option of coverage was available, Lower says.
Mutual of Omaha provides access to information via an 800 number in addition to Web access, Lower says.
One potential way to increase Web access, Lower says, is to install kiosks when enrollment is conducted.
Reproduced from National Underwriter Life & Health/Financial Services Edition, October 8, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.