In the group term life insurance market, sales often hinge on three things, says Blaise DiFedele, national sales coordinator at Reliance Standard Life Insurance Company, Philadelphia, Pa.
Its a “you die, we pay, whats it cost?” kind of transaction, he says.
Seeing that, Reliance decided to give its own group term product a competitive edge by adding a new “living benefit” to the contract.
This living benefit is a critical illness feature that pays a lump sum equal to 10% of the employees group term life coverage, up to $100,000.
To trigger the benefit, an employee must qualify for waiver of premium benefits as a result of total disability caused by one of five critical illnesses: cancer, heart attack, stroke, kidney failure, and major organ transplant.
The employee can use the money for any purpose.
The CI payout is an additional benefit, offered through the group policys waiver of premium provision, not a death benefit acceleration, DiFedele stresses.
Therefore, the life policys death benefit remains intact.
The insurer believes the CI benefit will differentiate its group life product from others in the market. A few other insurers do offer a CI benefit with their group life plans, DiFedele allows, but these typically accelerate the death benefit rather than pay a separate CI benefit.
And some insurers do offer stand-alone CI coverage to groups, he points out, but these tend to be voluntary plansi.e., the benefit is available only to employees who elect the coverage, not as an automatic benefit to all employees in the group plan.
DiFedele believes a significant factor, in the Reliance product, is that the company does not require policyholders to pay an extra charge for the CI benefit.
There is a load for the CI feature in the overall group pricing, he notes, but its impact is so insignificant that “it would be lost in the rounding” in competitive situations.