Let's consider why new voluntary products come into the benefitsmarketplace, how they emerge and what might be around thecorner.

As to why they emerge, employees like being offered voluntaryproducts because they're convenient. The voluntary market is agreat distribution channel, because the typical shopping process isdisrupted. The process typically asks customers to take severalsteps in order to make a purchase. One model suggests they mustrecognize a need, search for information on possible solutions,evaluate alternatives, make a decision and purchase.

The typical insurance purchase process follows this model, withsome roadblocks. For example, many people deny the need forinsurance, or actively dislike it. People hate to even think aboutinsurance. If you want to be a pariah at a gathering, just telleveryone you are an insurance agent.

People like to evaluate alternatives online; you can do it withauto insurance, but with life insurance, not so much. I recentlywent to the most popular life insurance quote site, and when it wastime for the payoff, the dreaded screen said “enter your full nameand address here so our agent can provide you with yourpersonalized quote.” Click. I'm gone.

Employers and their advisors recognize employees need financial security. Thus, they design a packageof employer-paid and voluntary benefits, which creates a valuableshortcut in the purchasing process. The information search andalternative consideration is taken care of. They simplify therecognition of need by selecting benefits that meet common needs oftheir employees and their families. They work with insurers andadministration systems to make the purchase decision and processsimple and easy. Voila—disruption!

Now let's turn to what happens after disruption. A marketfollows with growth into broader product offerings. Amazon began bydisrupting books. Today, they sell millions of products.

The same product extension is happening in voluntary benefits.We saw extension of the products sold inside existing benefitcategories, such as critical illness coverage added to supplementalhealth products. Then the market expanded into “non-traditional”products like ID theft, pet insurance, purchasing plans, and legalservices. The market is in post-disruption mode.

Are we to expect a continuing proliferation of products? Ofcourse, as new needs emerge, new products will arise. But customersmust meet their core needs, and asking them to keep buying moreproducts sometimes confuses them into buying something in place ofa core need.

We need to think the way Apple did when devising the iPhone.Consider how mobile phones became “a more convenient flashlight.”They planned to create a product that would allow people to callfrom anywhere. They extended that through several other functions,including photography. The end product turned out to be an embeddedflashlight.

Some of our products already have flashlight benefits, like LTCriders on some life and annuity products.

We need to consider all the possibilities our products candeliver. There's lots of room for creative thinking and productdevelopment in this area. We can and will conceive of featureshiding inside our products to extend their value withoutsignificant cost to the employee. The flashlights are there—we justhave to find them!