Major medical, life, disability: No question those three types of insurance form the foundation of a solid employee benefits program, and likely are part of every conversation you have with your clients. And they’re a great start, but they’re not enough; not if your clients want to offer a competitive benefits package, and not if you want to continue building your relationships with new solutions, opening new doors and increasing your revenue stream.
That’s why you should consider adding accident insurance to your portfolio. You won’t be alone: Voluntary accident sales jumped 11 percent from 2014 to 2015, with nearly a billion dollars in annualized premium and more than $2.4 billion of in-force premium, according to LIMRA’s 2016 U.S. Supplemental Health Sales and In Force Survey.
That trend continued last year, with another 2.3 percent increase in industry sales — and much more than that for some top voluntary carriers.
Clearly, customers are seeing value in this financial protection benefit and smart brokers are bringing it to the table. If you’re not yet one of them, here are five reasons why you should be.
1. America’s workers are financially fragile.
The average major medical insurance deductible is almost $1,500 and more than triple that — $5,000 — for high deductible health plans. Yet most employees don’t have that kind of money readily available. In fact, nearly half of Americans say they’d have trouble coming up with just $400 in an emergency, and only 37 percent could cover a $1,000 emergency room visit with money they’ve saved.
Accident insurance can help workers protect their financial well-being by bridging that gap. Even good major medical insurance can leave workers with significant out-of-pocket costs following an accidental injury, including emergency room fees and copayments, not to mention those high deductibles. There can also be nonmedical costs health insurance doesn’t cover, such as lost income from being out of work, rehabilitation, caregiver fees and travel costs to treatment.
Offering accident coverage can give your clients’ employees access to affordable ways to get the care they need, especially when the unexpected happens.
2. Accidents happen
“I’m not accident-prone” is one of the objections often heard by Rich Harrington, a top producer of accident sales for Colonial Life based in Rhode Island. He points out getting accident coverage isn’t, well, pointing a finger.
“Many times accidents aren’t your fault,” he tells employees during benefits counseling meetings. “It could be someone else causing you to get in an accident. I recently had two car accidents in a four-month period, neither of which were my fault.”
No matter whose fault, 39 million Americans do seek medical help for injuries every year, according to the National Safety Council. And that treatment can be expensive. For example, without health insurance, a trip to the emergency room for a broken arm can cost $2,500. If surgery is needed, that jumps to $16,000.
3. Other coverage might not cut it.
Health and auto insurance will cover my accidents, right? Maybe, but many accidents treated in hospital emergency rooms are related to sports, not driving. Basketball, bicycle riding, exercise, football and soccer are among the top injury-producing sports. And many common accidents such as falls, burns and cuts occur at home — by far the most “popular” place for nonfatal accidents.
Accident insurance can help pay for nonmedical costs, too, says M.J. Gattozzi Licata, a benefits counselor in Colonial Life’s North Atlantic region.
“With single men under age 30, I point out if something were to happen while they’re out there having fun, there might not be anyone around to help with bills. And if they work with their hands, an accident could prevent them from doing their jobs for a period of time.”
4. It adds value without cost to your clients.
With voluntary accident insurance, employees select and pay for the coverage if they want it, so there’s no cost to your clients. Employees can buy coverage for themselves, and sometimes their spouse or partner and their eligible dependent children.
Accident insurance is usually indemnity-based, meaning it pays a set amount based on the injury and treatment the insured receives. For example, a policy might pay $1,400 for a broken leg or $2,800 if surgery is required to treat it. The benefits are paid directly to the insured and aren’t reduced by what some other insurance might pay. Unlike workers’ compensation, it can cover injuries that happen off the job as well as at work.
Most accident plans are compatible with health savings accounts, which could be increasingly important if health care reform proposed changes continue to make HSAs more attractive to consumers and employers.
5. New options create personalized plans and expand coverage.
Accident plans have evolved in recent years to offer greater customization and even more value. The newest plans allow your clients options to include additional benefits in their base plan to create coverage that best meets the needs of their employee population. Examples include an “active lifestyles” option that increases the benefit amount, a gunshot wound benefit for expenses from a nonfatal gunshot wound, and a wellbeing benefit that helps pay for routine preventive care such as a colonoscopy, mammogram or blood test.
Today’s plans also allow employees to further customize their coverage by choosing from a variety of optional riders. These can include a disability income rider that pays benefits if the injury keeps the employee out of work, a critical illness rider that pays a lump sum when a serious illness such as heart attack or stroke is first diagnosed, and a hospital confinement rider that helps pay for hospital admission to treat a covered sickness.
It’s no accident more and more employers and employees are seeing the value in voluntary accident insurance. It’s simple, affordable coverage that meets a growing need for today’s financially fragile workers. By bringing accident insurance to the table, you can help your clients offer a more comprehensive, competitive benefits program while controlling their benefits costs — and create a new revenue stream for your business.