The voluntary life process "unsticks" employees and makes them life insurance buyers, rather than just shoppers. (Photo: Shutterstock)
It's impossible to separate the products we market from the processes that support them. And the events of 2020 underscore how important our products and processes are to one another.
Consider life insurance. While life insurance is generally familiar to everyone, the market outside of voluntary benefits has been stagnant. Studies show that less than half of Americans own the life insurance they need. Why is this true, in light of the familiarity people have with the concept? LIMRA studies find that many people become "stuck shoppers." They simply don't know how to make a decision about life insurance; they don't understand the need, don't know how much they should buy, what type to buy or where to buy it.
Marty Traynor is an Omaha-based consultant in the benefits field. Recommended For You
The process in the traditional individual life insurance market offers little support. By contrast, when employers offer a group plan, they nearly always remind employees that a base of group term life often doesn't provide enough protection. Voluntary life insurance options are available from many employers and support employees through a strong, simple process.
First, decisions are simplified when the employer and their advisors select the insurer. Second, voluntary insurance packages are easy to understand. Amounts are packaged based on percentages of pay or easily relatable increments: $50,000, $100,000, and $150,000. Third, it's easy for employees to see the price, usually shown as the payroll deduction for a given benefit.
The underwriting process is totally streamlined, too. All employees need to do to purchase $100,000 of life insurance is click a button.
Employers take care of the "backend" details like communicating with the insurer, transmitting employees' coverage choice to the insurance company, and arranging for the premiums to be deducted from paychecks. Most are handled through a benefit administration system that also makes the process easy for the employer.
In short, the voluntary life process "unsticks" employees and makes them life insurance buyers, rather than just shoppers.
The voluntary process supports other products as well, reminds employees that there are gaps in employer-provided plans, and provides options to insure those gaps rather than self-fund them.
As the COVID-19 pandemic has changed many aspects of the workplace this year, the interplay of our products and services has even more value. Employees and their families have become more aware of their vulnerabilities. For several years, the administration and communication of voluntary plans has been supported by digital processes from both insurance companies and benefit administration providers. This technology has been adapted quickly to support enrollment through collaborative visual online meetings. Communications to employees about their benefits are supported by multichannel dissemination.
The three hallmarks of successful voluntary benefits programs are that they meet a relevant need for employees and their families, that they are affordable, and that they are easy for both the employer and employee to administer. And all of this works because the products and processes are fully aligned with the needs of our customers.
