There are a few basic truths underlying the popularity ofvoluntary benefits;affordability is one of them, along with understandability andprocessing ease. For an employee, voluntary plans are easy to applyfor, to qualify for, and to pay for. For an employer, there islittle work beyond allowing enrollment and handling the payrolldeduction process.

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However, for various reasons, HR benefits managers may have themistaken belief that voluntary benefit plans areexpensive—possibly dating back to pricier products that have beensold in the past. This happened to us recently. One of our brokerspassed along a message from an HR benefits manager whoasserted their employees making $12 to $15 an hour “should not beoffered voluntary benefits because they cannot afford them.” Thiswas the reason given for not allowing some eligible employees toattend our group meetings. Meanwhile, the employer had no life ordisability plan for these employees.

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We helped our broker by providing a simple analysis of theaffordability of our product package. The employer made assumptionsabout the costs, thinking we'd hit people up for too much money.So, we shared a few examples to make a point about affordability(these are actual prices for the members—most insurance companieswill have similar, not identical, prices).

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Voluntary term life—cost per month of a $50,000 benefit:

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Age 25: $2.45

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Age 35: $3.40

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Age 45: $5.25

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Age 55: $23.15

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Voluntary rates for $300-a-week benefit (typical for someonemaking $12 to $13 an hour): all ages $24/month.

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The total cost (even at age 55) is less than $50 a month. Thecost for these workers is about $6 to $11 a week.

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Meanwhile, think of the money these people may be spending onnon-essential items. A latte a day may be the coffee habit ofchoice for some. But at $4 a piece, that latte habit can cost over$100 a month. Even a couple of Mountain Dews a day could be $50 amonth. The benefits manager wouldn't tell people to cut outMountain Dew or their favorite coffee—yet those items should beconsidered extras, while personal and family financial securityshould be considered essential.

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Our example shows how even entry-level employees can affordfinancial security, taking care of their basic needs for life anddisability insurance protection. Yes, we or the employer may alsooffer other voluntary options that can be seen as less essential.We position those for employees who have taken care of basics andare looking for extended protection at an affordable cost.

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The $12- to $15-an-hour worker probably needs life anddisability products even more than people making three times asmuch. They are unlikely to have enough savings to get through toughtimes without going into debt or eradicating their retirement fund.They trust their employer's choice of voluntary options and enjoythe ease of qualifying on a guaranteed basis.

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We were very happy, in the end, that our broker was able toconvince the HR manager that our program is affordable, and theenrollment was a success.

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