One question that seems to keep coming up is whether productsare “worksite” products or “voluntary” products. Let’s analyze thedifference.

Historically, it’s safe to say worksite products have theirroots in individual insurance products, while voluntary productshave their origins in group products. But as Hegel observed, overtime a synthesis emerges between competing theses and this isreflected in “hybrid” products that combine some of the principalsof group and individual insurance.

First, a product is built around several elements—the benefitsit offers, the processes that support it and the compliancerequired by regulators. Are the benefits any different in worksiteor voluntary? Not in my eyes. A death claim is a death claim. Adisability is a disability, and although there are vast differencesin the definition of disability between products, these differenceshave nothing to do with the worksite/voluntary distinction.

Products like critical illness and accident are often referredto as worksite products, but in reality that is because they havehistorically been marketed by carriers whose roots are inindividual products. There is nothing about them that isintrinsically “worksite.” The one type of product that’s remainedfirmly in the worksite camp is permanent life, which has verydifferent characteristics. These products might be cloaked asuniversal life, whole life or “permanent term.”

Characteristics that keep them in the individual column centeraround the cash value and accompanying regulation, including statereplacement regulations and federal tax exchange rules. And becauseof the cash value element, plus the lifetime level premium expectedof the product, permanent life portability has more meaning. Forexample, a covered person who doesn’t bother to port their criticalillness product might lose insurability or issue age pricing, but acovered person who fails to port their permanent life plan mightforfeit thousands of dollars worth of account value as well.

What about the processes supporting products? Again, permanentlife stands out because it requires much more thorough tracking ofindividual account values. Many group voluntary products are, infact, self administered by employers, much like employer paid groupplans. Group voluntary carriers typically don’t roster muchinformation about their certificate holders, beyond basic coverageelections and contact data. What does all this mean in the eyes ofour customers? In my opinion, neither employer decision makers noremployees give this distinction any thought.

If an employee sees a product as a benefit, they’re not thinkingabout whether it is worksite or voluntary, or who is administeringthe product. They want good products conveniently available atwork. Our responsibility is to help employers identify and deliverthat value. I often hear voluntary products are not as “shopped” astraditional employer-paid group products, because they’re moredifficult to compare. I’m not at all convinced this is true. Itseems to me that clouding the picture with a distinction betweenworksite and voluntary is just code for keeping customersconfused.

I think we can do a responsible job of assessing the value ofproducts employers choose to enable so employees can buy and payfor them. We should base this on the merits of price, coverageprovisions and supporting service.