Helping Employers Understand The Need To Close The Underinsured Gap

Re-Evaluating Coverage After Life Events

As employees move through the different stages of lifenew families, established families, pre-retirees and retireestheir life insurance needs change. Since a persons life stage directly influences that persons needs for insurance and other financial products, it is important for employees to re-evaluate and adjust their life insurance coverage after life events, such as getting married, purchasing a home or having a baby.

Re-evaluating coverage may be one of the most effective ways to help ensure financial protection, but it is often overlooked by many employees. In fact, the research revealed that 32% of working Americans who had a baby and 25% of those married within the last 18 months do not own any life insurance coverage. Furthermore almost 20% of survey participants who purchased a home within the last 18 months still had no coverage. Consider advising your clients to communicate proactively to their employees the importance of evaluating their life insurance coverage as they experience different life events.

Increasing Employee Participation

When faced with benefit decisions, many employees focus on researching health plans and investment strategies, often overlooking their life insurance coverage. Since most employees obtain coverage through the workplace, employers play a part in helping to narrow “the underinsured gap.” Insurance carriers can help by working with employers to conduct off-cycle re-enrollments, offer simplified underwriting guidelines, and provide online enrollment and plan administration to help increase employee participation.

In addition, consider recommending these best practices to your clients:

Using enhanced employee communications to educate and build awareness about the need for ample life coverage is critical for increasing plan participation and helping employees attain the coverage they need. Considering that most employees prefer to receive benefit materials at the workplace, clear and concise communications highlighting the need for financial protection are effective. Once employees understand their life insurance options, they may be better prepared to make the most educated benefits decisions.

Using multiple media channels to communicate benefit information is effective, since different employees respond to different media. Some suggested best practices include offering employees electronic communications such as the Internet/Intranet and e-mail, which offer ease of use and convenience. Whats more, nearly half of employees surveyed prefer to enroll in their benefits via the Internet or company Intranet.

Traditional communication vehicles including group and individual meetings, and distributing personalized benefit packages to employees at home and at work are also an effective means for improving benefit communications. Consider encouraging your clients to provide their employees with benefit information frequently and through multiple communication channels to best suit their individual needs.

Providing needs assessment tools, such as an interactive life insurance calculator, can help your clients employees determine how much life insurance protection is right for them based on their individual financial circumstances. These best practices are key to helping increase plan participation, which is a win-win for allbrokers, employers and employees. These best practices are also easy to implement and can help motivate employees to get the coverage they need.

In addition to helping your clients meet their benefits objectives, you can help employees obtain the most value out of their life insurance benefits. Join the effort to narrow “the underinsured gap” and help your clients secure and promote the decision-making tools and enhanced communications needed to educate their employees about the need for life insurance.

Tony Trani is vice president, life products management, MetLife, New York. He also is president and CEO of Paragon Life Insurance Company, St. Louis, a MetLife company.

Reproduced from National Underwriter Edition, November 18, 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.