InsuranceNewsNet July 13, 2018
By David Polen
If I asked you to
name a billion-dollar-selling employee benefit, accident insurance might not be
the first to jump to mind.
But it is: $1.1
billion in premium last year, to be exact. Eastbridge Consulting Group reports
voluntary accident insurance is an increasingly popular employee benefit, with
sales surging nearly 40 percent between 2013 and 2017.
That’s because
accident insurance has continued to evolve to meet the changing needs of
today’s consumers, from millennials entering the workforce to baby boomers
preparing to retire. Here’s a look at five ways accident insurance is morphing
to keep its spot as a must-have employee benefit.
- Richer benefits.
The newest plans
have been refreshed to pay more. Many insurers have refreshed their accident
policies to provide greater benefits to policyholders for covered injuries.
Simply put, accident insurance offers more value than ever before.
- Greater flexibility.
This goes beyond
offering two, three or four levels of coverage to meet different employee
budgets. Newer accident plans include a selection of employer-optional
benefits, such as a wellness benefit for health screenings or a hospital
confinement benefit for a covered sickness, or higher benefits for sports
injuries or even gunshot wounds.
These benefits
expand employers’ options so they can customize the coverage for their employee
population. For example, a city or county government employer might select the
higher gunshot wound benefit because its employees include police and other
emergency workers. The sports injuries benefit appeals to workers with active
families. In fact, the latest version of that benefit is sometimes called
“active lifestyles.” Those who select it are eligible for higher benefits,
whether the covered injury happens on the ballfield as part of an organized
sports activity or in the yard at home playing tag.
- Emphasis on family coverage.
The stereotypical
buyer of accident insurance is a man in his 30s or 40s buying coverage for
himself. And our company’s sales results prove this out. But close behind is
family coverage including children — and step-children. With up to 50
percent of marriages ending in divorce, there are more blended
families in this country than ever.
One of my
co-workers found the value in his family accident plan when barely 24 hours
after saying “I do” with his second wife, her teenage son — now his new
step-son — broke his ankle playing football. Isn’t that the call you’d love to
get as you’re leaving on your honeymoon? But the good news is the budding
gridiron star was covered, even though he wasn’t in the picture when the plan
was first purchased.
- More group plans.
The increased
interest in accident insurance has lured new players into the market, including
some carriers that haven’t traditionally offered voluntary benefits. These
carriers tend to gravitate toward group plans because of their lack of
expertise in individual platforms and because brokers are often more familiar
with — and therefore comfortable with — group products.
More competition is
often good for consumers, but it also can increase the burden on you. It
becomes more important than ever to closely evaluate the carriers you choose to
work with to make sure they have the experience and expertise in voluntary
employee benefits to best serve your clients. In addition, a group plan may not
always be the best fit for all of your clients. A partner that offers both
individual and group products gives you a wider range of solutions.
- Greater need.
America’s workers
are becoming increasingly financially fragile. Only 39 percent have enough
savings to pay an unexpected expense of $1,000, according to Bankrate.com. At the same time, Milliman’s
2017 Medical Index found an average family has more than $4,500 in
out-of-pocket medical costs each year. That math doesn’t add up.
Some of this gap is
no doubt caused by the growth in high-deductible health plans, which require deductibles of at least $1,350
for an individual and $2,700 for a family. HDHPs are increasingly popular as
employers scramble for solutions to control rising benefits costs and keep
premiums affordable for their workers. The downside is these plans increase the
potential financial exposure for employees. Voluntary accident insurance to
help pay for the unexpected costs of an injury can play an important role in
their financial protection.
More value, more
flexibility and more options - accident insurance is continuing to evolve to
meet the needs of today’s consumers to protect their families, their finances
and their futures. If you don’t have accident insurance in your portfolio of
solutions — or if it has been a while since you’ve looked at what’s new —
there’s no better time than now.
David Polen is a
director of product and market development at Colonial Life & Accident
Insurance. David may be contacted at david.polen@innfeedback.com.
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