The new buzz phrase in Washington, D.C. these days is "health care reform," which has become a top priority of the Obama Administration. The last time Congress took up this issue, Secretary of State Hillary Clinton was first lady and her plan for universal health care, after much acrimonious debate in Congress, never made it to President Bill Clinton's desk for a signature.
Once again, health care reform is being hotly debated both inside and outside of the Capitol Beltway. And once again, no one can be certain what reforms will or won't be adopted by Congress or signed into law by President Obama; nor can anyone predict with any certainty what reform may mean for those who sell private health care insurance to employers.
That's why many brokers who sell health insurance are increasingly looking to expand their sales of ancillary products, especially group life insurance. Brokers who have sold group life know that the product is very straightforward and relatively easy to sell because most employers and employees realize the importance of protecting family finances against an untimely death. But those who sell group life insurance also know how hard it can be to stand out in what has become a crowded market.
The competitive landscape in the group life market is beginning to shake and shift. Insurers are starting to offer valuable "end-of-life" benefits to employees covered by group life policy. These tremors are taking the form of new benefits and services that can include free online will preparation, estate planning guidance, funeral planning assistance, and even consultative services to help families talk about "end-of-life" issues.
Life insurers are adding these benefits and services to their group life offerings as part of a new strategy to better differentiate their products and services in the marketplace. Often, these new "value-added" benefits are offered at no charge to employers or employees. The timing could not be better.
The Hartford's Employee Benefits Landscape Study this spring found that four out of five employees (82%) say it would be helpful to have end-of-life benefits and services available through their employers. Two out of three workers (67%) who have children said these services would be "very helpful" or "extremely helpful."
These findings are not surprising given the aging of the population. Many baby boomers, approaching or in the throes of planning for retirement, have already had to wrestle with difficult end-of-life issues with their aging parents. In some instances, benefits such as funeral planning are also available to both employees and their parents.
Employers have taken notice of the changing demographics of the workplace and their employees' appetite for more planning-oriented benefits and services through the workplace. In an era when employers are cutting health care benefits, passing on higher costs to employees, and reducing or eliminating matching contributions for 401(k) retirement plans, the "value-added" benefits now available through group life coverage is perhaps the one area where employees are actually seeing their benefits increase.
Where there's a will
The most widely available value-add is will preparation. A last will and testament is an important legal document that can protect a family's financial future, avoid bureaucratic entanglements over property, and ensure final wishes are carried out when someone passes away. But drafting a will can cost several hundred dollars or more, perhaps one reason why a 2008 survey by www.findlaw.com reported that nearly 60% of Americans do not have one.
The number of Americans without wills will hopefully decrease as more employers offer will preparation services, which allow consumers to enjoy the peace of mind of knowing that their assets will be left safely in the hands of those they trust and care about. A will can clearly state wishes as to who will inherit their property, be the guardian of children and manage an estate. Without a will, those questions are left unresolved and often are administered by the state.
Will preparation services now available through group life insurers typically allow consumers to create their own will online by answering a series of questions. In most cases, assistance is available online from licensed attorneys.
Additional estate planning services are sometimes available for a modest cost. Consumers can go online to create a living will to provide directions for their medical care should they become incapacitated, obtain legal guidance about divorce proceedings, change their names, or create a living trust to limit tax liability in the disposition of their assets when they die. Other trust and planning services may be available as well.
Funeral planning
Recently, group life insurers have started to add funeral planning and concierge services to enhance the value of their group life insurance. The value of these services can be considerable, both emotionally and financially.
The planning services allow consumers to plan for funerals years in advance through the use of online tools and resources to clearly state their final intentions. The concierge services provide support and guidance during what can be one of life's most emotionally wrenching moments. Once a family experiences a loss, a simple phone call can put a bereaved family member in touch with a funeral planning advisor, who can explain what needs to be done, what options are available, and once decisions are made, can then put the entire process in motion.
Often, someone who experiences the loss of a loved one can be highly vulnerable, especially when making costly decisions, such as funeral plans. Few people who are grieving ever shop for funeral services or negotiate on price, an expensive proposition that can place a significant financial burden on a family.
A funeral planning advisor can be of enormous help in this situation. With the consent of the bereaved, an advisor will contact several funeral homes within an area, compare prices for specific services, and negotiate with the funeral directors to obtain the best price possible. The bereaved then selects the funeral home that provides the type of service that they desire within the confines of their personal budget.
Best in class
The best-in-class providers offer a comprehensive Web site with tools, information and services employees need to plan important conversations with their families about end-of-life issues. Ask if your provider backs the site with a team of trained advisors to answer questions and connect consumers to appropriate resources. A top-notch service will make these advisors available 24 hours a day, seven days a week.
In addition, the best end-of-life programs offer tips to help families more easily and effectively discuss planning issues. These tips can help families discuss what can be awkward or difficult topics such as elder care, communicating final wishes, and leaving an inheritance.
Battling procrastination
More than ever before, families are focusing on end-of-life issues. But here is a real disconnect between what people say is important to them and what actions they actually take. The Hartford's Employee Benefits Landscape Study found that 94% of survey respondents said it was important to have such discussions with their families about inheritances, funeral plans and related issues. Yet, 58% indicated they had not had conversations with their families about funeral plans and 65% had not discussed the contents of their will, an indication that consumers need help in talking about such topics.
Anyone who sells life insurance for a living knows that procrastination is perhaps the biggest impediment that people face when it comes to financial planning of any kind. The end-of-life planning tools that increasingly are becoming available through employers represent an extraordinarily positive step in the right direction toward encouraging people to take action.
As Americans age, approach retirement or simply want to live better in retirement, they are looking for new services. Baby boomers especially are taking advantage of financial planning services and products. End-of-life planning services represent the latest frontier in employee benefits.
By working with group life insurers that offer end-of-life benefits and services, you are providing a real service to employers and their employees. Doing so can help you expand your business and help build a financial and marketing buffer against the uncertainties of health care reform. But whether health care reform impacts your practice or not, selling group life insurance and offering valuable new end-of-life benefits will allow you to differentiate yourself in the eyes of your clients as a true benefits professional.
Astrid M. Patterson is an account executive representing The Hartford's Group Benefits Division in its Houston regional office. She supports sales of The Hartford's group life and disability insurance through independent agents.
