Life Insurance Selling

BY THE NUMBERS

product if they were shown how it could be affordable.

55%

of brokers are increasing their focus on selling ancillary benefits, such as disability insurance, in anticipation of health care reform’s effect on their businesses.

Building the right plan

Voluntary ancillary benefits may be the solution. These products, now an important part of a broker’s portfolio, allow employers the ability to offer valuable benefits while providing employees the opportunity to take advantage of group rates on coverage. These rates are typically less expensive than purchasing an individual policy.

Offering clients voluntary disability choices addresses a perceived stumbling block to selling disability insurance — price. Many voluntary disability policies have the same benefits as an employer-paid plan and offer employees a choice on how much of their income they want to insure, up to a predetermined cap.

Like employer-paid disability products, however, not all policies are created equal. There are certain features to review to make sure you are presenting a valuable, quality product to your clients.

•Definition of disability: There are varying ways that policies define being disabled. Some of them focus on the actual sickness or injury; others look at occupation type or earning potential. There are “and/or” disability definitions. An “and” definition means a claimant has to have both functional loss and financial loss, while an “or” definition requires only one. Plans also vary according to occupation. Some policies will consider a claimant disabled if he or she is unable to work in any gainful occupation, while some will define disability as being unable to perform the material duties of the claimant’s regular occupation or specialty.

• Plan duration: Some policies will offer flexible plan duration. The average long-term disability keeps an employee out of work for 2½ years, according to the CDA, so it is important to have a long-term coverage option that will offer maximum benefits.

• Rehabilitation: Most policies will have provisions that help employees with transitional work, job accommodations and rehabilitation, with the goal of returning individuals to a productive lifestyle. While this is important for insurance carriers, rehabilitation is also important on a personal level. Look for policies that have a robust return-to-work program with rehabilitation assistance.

Some employers already offer comprehensive disability plans, including short-term and long-term disability and paid time off. What many of them may not realize is that the policies and benefits they have in place may overlap or, conversely, have a gap that leaves employees without coverage and benefits for some period. They could be needlessly spending money, for example, if their short-term disability policy kicks in before an employee runs out of paid medical leave.

In other instances, short-term and long-term disability policies may overlap for several weeks or even months. A total income protection assessment can help clients uncover potential cost savings and help them integrate short-term and long-term disability, sick leave and salary continuation plans so employees aren’t over-or under-insured.

While there may be some confusion

Source: 2010 Assurant Employee Benefits broker survey

about the need for disability insurance policies, it is clear that this coverage is not just for those who wear hard hats. It is important that brokers educate their clients on disability insurance as a necessity. Disability Insurance Awareness Month provides an opportune time to raise this topic. Clients may not be as averse to hearing brokers talk about disability insurance as they may think. According to the 2002 ACLI survey, 85% of small employers would prefer to have a broker talk to them about disability insurance options rather than speak to an insurance company or find the information online.

Sheryle Ohme is senior vice president of claims operations at Assurant Employee Benefits.

Assurant Employee Benefits is the brand name for insurance products underwritten by Union Security Insurance Company and for prepaid dental products provided by affiliated prepaid dental companies. In New York, insurance products are underwritten by and prepaid dental products are provided by Union Security Life Insurance Company of New York, which is licensed in New York and has its principal place of business in Syracuse, N.Y. Plans contain limitations, exclusions, restrictions and reductions. Contact Assurant Employee Benefits for costs and complete details.