According to current best estimates, something like 80% of the critical illness insurance currently on the books in the United States has been sold in the workplace.
Insurers selling CI in this channel report excellent response rates–30% and more, when the product is offered on its own.
Even when presented as part of a menu of product choices, the product sees significant response, even from relatively young employees.
What message does this growing success have for producers and insurers?
First and most important, the products concept is simple and appealing.
In the worksite, enrollers typically spend less than 10 minutes with each prospect. Their message must therefore be crisp and directand it must accomplish several key things. For instance, most people have never heard of CI insurance, so the enroller must first educate on what CI insurance is and why the person needs it–before discussing the nitty-gritty on coverage and cost.
To those who normally spend an hour or two presenting an insurance product, it may sound like “mission impossible” to accomplish this explanation in 10 minutes. Yet it is done successfully in a worksite setting every day!
This is helped by the fact that there is almost universal need for this protection.
In todays world of spiraling medical costs, many people have seen their group medical benefits cut back as employers struggle to contain plan costs. Employees know their medical insurance will not cover all expenses if they should get sick. So it is not a big leap to get them to consider the consequences of how “out of pocket” medical expenses could be crushing to them and their family.
It is really no surprise that recent research has shown that single parents are extremely responsive to the product, despite their typically stretched budgets.
Putting it simply, people want to say “yes” to this insurance because it makes sense to them. It offers them choices; it meets a need they readily can understand.
In the workplace, we see the wonderful dynamics of the “seminar” sale when the product is introduced at employee meetings. These meetings provide a rare opportunity to get people to connect with the frequency of heart attack, cancer and stroke. Even people whose lives have not been touched by one of these diagnoses get to see around them the pervasiveness of these events.
Another lesson: Worksite insurers have learned to focus on the practical aspects of the sale.
They have come to terms with the products relatively high price. In this environment, for example, there are no calculations of “how much CI coverage do you need?” The operative question here is “how much can you afford?” The good players go a step farther, presenting the cost in the simplest possible termsper day, per week, per pay period.
A $30 monthly premium sounds like (and is!) a bargain, when expressed as “less than a dollar a day.”
There is a lot of discussion in the industry about product features and covered events. The U.S. market does not yet have a “norm” in the design of the CI insurance product. Instead, the insurers, often with the assistance of their reinsurers, define and differentiate their own CI offerings. It is interesting to see the wide variation of CI products available–and the success of a quite diverse menu of features. Employers select the version that works for them. Typically, they choose plans that allow employees a minimum amount of product choice, if any.
Employees count on the employer to have made a good choice. Therefore, when the product is offered to the group, one element of the sale already has been determined.
In terms of CI coverage, the common denominator is always the “core” diagnostic events of cancer, heart attack and stroke plus, typically, a few additional events such as major organ transplant, kidney failure and coronary bypass.
What is noteworthy is that there seems to be little if any measurable difference in response by employees to different CI products, other than what could result from differences in the quality of the products presentation to the prospects.
The take-aways? The appeal of CI in the worksite market is that it pays upon diagnosis of events that most people relate to and will experience at some pointcancer, heart attack or stroke. The other product features are the “bells, whistles and frills,” not the basis of the decision to buy.
The KISS (“Keep It Simple Stupid”) principle applies absolutely. The agent/broker must understand the fine points of the coverages, but what this product does is central to its appeal. The need is almost universal and it applies in particular to “middle America.”
The U.S. CI marketplace is poised to explode. The worksite distribution has been quietly and successfully bringing this product to a very responsive audience. Other distribution channels can and should learn from this model. The product is easy to sell when you do it right and there is a huge population of prospects out there!
is vice president-CI insurance marketing for Optimum Reinsurance Company in Dallas, Texas. Her e-mail is: email@example.com.
Reproduced from National Underwriter Edition, January 16, 2004. Copyright 2004 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.