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Life Health > Life Insurance

Small Extras Can Bump Up

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If voluntary insurance benefits are a way for employers to provide a little extra to employees, benefits manufacturers themselves are trying to sweeten some products to build interest and hopefully foster enrollments.

MassMutual, for instance, recently added an employee assistance package from a third-party administrator to its worksite disability insurance policy.

The program, GuidanceResources, provided by ComPsych Corp., Chicago, extends counseling and information to help relieve stress and anxiety to disability income insurance policyholders and their families. The idea is to help employees keep control of the often emotionally trying situations that accompany a disabling injury or illness, says Larry Hazzard, vice president of marketing for MassMutual’s disability products.

The program offers health assessments to help spot early signs of depression, a common problem when a disability strikes. It also provides eldercare referrals to help fill the gap when the person who is disabled had been giving care to another.

“The idea is to help people avoid stress- related complications,” Hazzard says. “Claimants have access to live local counseling programs, because many physical disabilities have an accompanying bout of depression. This offers much more holistic service to the claimant. For us, it provides a higher level of disability support. Our hope is to return claimants to productive lives sooner.”

MassMutual applies what it calls a “Build-to-Suit” program to worksite benefits, by trying to tailor them to meet the needs and culture of each organization it serves, he says. “It includes an extensive variety of resources that range from daycare search services to information on parenting, depression or adolescent’s use of drugs, just to name a few.”

He says the program has had an “incredibly positive reaction,” according to company agents.

“We’ve had in the first two weeks of the program four people referred to our rehabilitation services and roughly 1,000 folks using consultative services. Most were traditional assistance, and another 33% used the financial counseling component, while about 15% used its legal advisory service to get help dealing with credit or other legal issues arising from their disability.”

As another improvement, MassMutual is trying to expedite is its traditional application process to make it less time-consuming, Hazzard says.

“Most of the process is built to screen out the tiny fraction who intend to commit fraud, so everyone is subjected to the rigorous application,” he says. “We are trying to be more user friendly, so the whole application is much more streamlined and less intrusive.”

UnumProvident distributes its worksite products through employee benefits brokers, so it positions them to fit the overall benefits package the broker offers, says Neicee Durrence, a company vice president.

“They are interested in flexibility of offerings, particularly in support of health and non-life offerings, such as disability, accident and critical illness,” she says. “We’ve seen the market looking for more employee choice and the ability to maximize premium dollars by making sure product features support the direction the employer wants to take.”

As a result, UnumProvident has increased its use of wellness benefits to accommodate the increasing number of employers that want to promote preventive care. These add-ons to its supplemental health policies pay for routine examinations like mammograms.

UnumProvident also recently beefed up its accident insurance plan, adding a disability income sickness rider.

“Basically, it streamlines our standard short term disability plan,” Durrence says. “So it’s a combination approach that offers what best suits the employer and the needs of the employee.”

By and large, UnumProvident has seen more interest than ever in a menu of benefits, she notes.

“Everybody is aware of fundamental life and disability insurance, and employers are now more open to consider others, such as critical illness, a single product that offers a lump sum benefit for the big three: cancer, stroke and heart attack,” she says. “The ability to maximize a benefit across broad needs is at the forefront in decision makers’ minds today.”

Another add-on that has increased the popularity of its voluntary life insurance products is a long term care rider, she says. Basically, it offers an early payout on life contracts, triggered by injuries that impact several activities of daily living.

“It’s very attractive to middle-market consumers when maybe they cannot afford a stand-alone LTC offering,” says Durrence. She estimates the company is selling the rider for 50% of its major life cases, compared to 20% just three years ago.

Transamerica Worksite Division, Little Rock, Ark., has also added a long term care option to its worksite universal life product. It has shown strong appeal to many employees, according to Joe Childress, product specialist for the company.

Another new UL feature for Transamerica is its “Add-a-buck” option, which allows a worker to upgrade coverage as his or her income rises. Under this option, the workers can buy a specific level of coverage for, say, $5 a week at startup. Then every year at renewal, the premium will automatically increase by $1 a week, while the face amount increases accordingly.

Product tweaks every three to five years are part of Aflac Inc.’s basic marketing strategy for its supplemental health plans, says Karen Ridel, second vice president of product and market development for the company.

“Needs change, treatments change and we want to make sure our products have appropriate benefits, particularly with a line like cancer insurance, where treatment protocols change so rapidly,” Ridel says.

Consumer research told Aflac the worksite market would respond well to choices of different levels of coverage for insurance products.

“All the while, we keep trying to keep it simple, because people want to do business with a company that’s easy to do business with,” Ridel says.

Aflac recently introduced a version of its hospital indemnity plan that’s compatible with consumer directed health care plans.

It updated a supplemental policy by offering it with three options: option one includes hospital confinement; option two adds surgical; and option three adds diagnostic testing and wellness programs, she explains.

Aflac is also preparing to issue an upgrade of its critical illness policy.

Currently, the plan provides lump-sum benefits for cancer, heart attack, stroke, major third degree burns and similar disabling illnesses.

“We found the market was more apt to respond to a policy that offered daily indemnity benefits, because with a lot of these critical illnesses, it’s likely you’ll get it again,” Ridel explains. “So a policy that would continue to pay over a lifetime, not just for a one-time event, is attractive. That’s why we designed it as a daily indemnity benefit.”

Aflac also just launched a new life portfolio in January, focusing on the underserved middle-income market.

“We’ve seen people understand they are underinsured and are looking for more,” Ridel says.

Most major life players in the worksite market focus on the highly compensated and offer only group coverage for others, Ridel believes. Aflac’s new lineup offers individual whole life with 10-, 20- and 30-year terms. The company is also selling term life policies offering a return of premium.

“Our position is, you constantly need to revise and reinvent policies as part of your strategy,” Ridel says.


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