There is so much going on today in the marketplace, between changes dictated by the economy and changes in the political sphere - all of which may have a lasting effect on selling benefits - that it's difficult to concentrate on the benefit products we market and ask whether we should change what we do in response to all these external forces.
After giving this some thought, one feature of most voluntary benefits stood out to me: portability.
Portability is the most underused and overlooked feature in the voluntary benefit arsenal. Oh, it is mentioned. When included, it always seems to be listed among the last few features in brochures. We have all seen the line that goes something like "best of all, this benefit is portable so you can take it with you should you leave your job or retire."
The fact is, portability is not often in the product feature spotlight because it is not unique to any carrier in individual worksite products. Nearly all are portable. Worksite carriers held an edge on group voluntary carriers in portability, though, until recently, when the trend Eastbridge Consulting calls "groupification" resulted in an increasing number of group carriers adding the feature to their voluntary group term life and voluntary short- and long-term disability income products. Portability is still not a universal feature in voluntary group plans. Sometimes it is restricted to portability that expires when the group master policy is terminated by the employer or by the insurance company, sometimes there is a time limit on portability (up to 12 months after termination of eligibility, for example), and sometimes there are other limitations. So it is important to know the details of the provisions for portability (and its close relative, conversion) in group plans.
Another factor is that carriers offering portability do not generally play up the feature when someone needs it. The letters offering portability often read like legal notices rather than marketing pieces. The premium payment options are often limited, and the premium notices may be sent with little or no explanation of the value of the product being billed. There is virtually no "outreach service" offering additional features or benefits that may have been added for active members of the original group. If there is one area I think insurance companies can improve when it comes to servicing the needs of today's customers, this is it.
Why is portability important today? In hard times, family financial security is more important than ever. The highly publicized layoffs by major financial employers and the big three automakers are being followed by echoes in many other sectors of the economy, such as retail. When you combine a desire for heightened financial security with high unemployment, the result is heightened interest on the part of employees for access to portable benefits. Portability has an enhanced value when the need to use it becomes more likely.
What can we do to make the most of portability features in voluntary products? First, make sure the employer or sponsoring organization is aware of the feature and the basics of how it works, especially if there is a risk of layoff or closure. They will very likely appreciate this added attention. Second, make sure to emphasize the feature during enrollment or employee education sessions. Don't just end with a rote "best of all..." statement. Cover portability the way you handle any highly important feature of a voluntary benefit, at the beginning, in the middle, and in the wrap up of an enrollment session or a written communication. Tell them "You can take them (voluntary benefits) with you"!
Marty Traynor is vice president of voluntary benefits at Mutual of Omaha. He can be reached at marty.traynor@mutualofomaha.com.
