According to LIMRA, 50 million U.S. households say they need more life insurance. That’s a huge window of opportunity for brokers assisting the employees of group customers in planning for the future.
It’s important for brokers to help clients demonstrate the value of group life insurance to their employees, so let’s dispel some of the myths of selling group life insurance that can affect the sale.
Myth #1: Life insurance is a commodity product.
Often, group life insurance is treated like a commodity because its complexity is misunderstood. Plan designs can be intricate, and many don’t realize how group life insurance affects a family once a claim is filed.
Brokers can provide additional value to clients by thinking through the nuances of different carriers’ plans. Each carrier may handle claims differently and offer varying additional benefits, such as travel protection and beneficiary financial counseling.
Certain demographic populations — employees out sick, taking accelerated benefits or waiting for waiver premiums — are perfect examples of why it’s valuable to understand the particulars of different plans. These groups may not easily roll over into a new plan if coverage is changed, so it’s important to understand how different carriers treat them.
Myth #2: Everybody already knows about life insurance, so employers don’t need much enrollment support.
Helping employees understand the value of participating in their employer’s life insurance plan is one way to maximize overall plan participation and increase employee awareness of the strength of their benefits package.
Urge employers to highlight life insurance as part of a robust benefits package during recruitment and hiring — the first days at a new job offer a great opportunity for an employee to purchase group life insurance.
See also: Exchanges juice voluntary market
Frequency of message is important, too. Employer-sponsored health fairs, on-site enrollment meetings and periodic informational sessions can bring in new participants. The communication vehicle should vary as well.
Use a variety of touch points, including emails and intranet messages, posters, brochures and phone calls. This personal touch, combined with the convenience of technology that younger employees respond to, will help motivate people to enroll.
Myth #3: Medical underwriting is a four-letter word.
Medical underwriting is becoming less complicated, easier and more convenient. Carriers are developing tools to reduce some of the hassle associated with submitting medical history statements.
Medical underwriting has long been a sticking point with many life insurance policyholders. Employees might not feel comfortable sharing sensitive medical information with their human resources department.
Allowing participants to provide medical information online provides the information directly to the carrier, offering a speedier response time and providing additional confidentiality for the employer. Removing barriers like this can make the prospect of purchasing group life insurance more attractive.
Myth #4: Voluntary policies are a tough sell.
Some demographics — men, younger and single consumers, and those without life insurance — are more likely to think they don’t need anything beyond what their employer provides. Helping employers communicate the message that life is a gamble — and not having life insurance when it’s needed is like dealing loved ones a losing hand — may help break through to these audiences.
Also, revisit your marketing strategy to demonstrate value for various demographics. For example, many policies are offered with a guaranteed issue. Employees may have the ability to receive the base amount of insurance coverage without medical underwriting during the open enrollment period. There are also future savings that can be realized from participating in a group plan.
The 2012 LIMRA Life Insurance Barometer Study indicated that younger consumers like the time savings reaped by having their company narrow down their product choices. And they believe they will receive improved customer service because of the affiliation with their employer.
Tech-savvy millennials also favor technologic solutions. Plus, online enrollment has the potential to increase plan participation as well as customer retention. It also helps mitigate the time brokers spend answering questions or dealing with issues, so you can focus on selling.
Other automated tools, such as online calculators, can motivate employees to apply for coverage and protect long-term finances. Online enrollment forms allow employees to enter their medical history electronically.
Knowing the intricacies of group life insurance policies — and communicating those policies to your HR clients — can help keep this important purchase top of mind with employees. Dispelling some of these selling myths in your own mind will make you a better resource for your customers as you help their employees plan for the future.
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