Worksite Marketing
Worksite Benefits Offer -Tremendous Opportunities
by Sandra Callahan

Worksite benefits make up one of the fastest growing business segments in the insurance industry providing a tremendous opportunity for brokers. New sales grew more than 10% in the voluntary market over the past two years and sales are expected to continue growing, according to a 2007 Eastbridge study. Seventy-two percent of employers in the 500 to 2,000 lives market offer voluntary products and 80% of employers in the over 2,000 lives market offer voluntary products.

In addition, employers that sponsor several worksite options are increasing their portfolios. Sixteen percent offer at least six voluntary offerings -- up from 11% in 2002, according to a 2007 report by LIMRA International.

The need for supplemental benefits is greater than ever with the uncertainty of government programs, the first Baby Boomers turning 60, and many Americans drastically underestimating their life expectancy and over estimating their financial resources. Employers face unrelenting cost pressures; healthcare and retirement worries overshadow other benefit concerns; and medical premiums continue to surpass other benefit cost increases. Voluntary benefits can be an important part of the solution.

Voluntary insurance packages, which offer coverage at competitive rates, are partially paid or fully paid for by employees. Voluntary programs generally require low levels of enrollment of eligible employees. Plans from some carriers have no participation requirement at all. In contrast, traditional group benefits require high levels of participation.

Core worksite benefits include life and accidental death and dismemberment, long-term and short-term disability, dental, and employee assistance programs. While employees say that medical insurance is their most important benefit, life insurance, prescription drug coverage, and dental insurance have moved into the indispensable category, according to a May 2007 Eastbridge study.
Voluntary healthcare and disability insurance programs are attractive to employers because they can supplement medical benefits that have been reduced due to budgetary constraints. Employers can enhance their benefit packages and enhance the employment relationship with limited involvement and without incurring a direct cost.

Employees can access needed benefits at a reduced cost and with more favorable underwriting than they could get on their own.
Many providers are implementing value-added services, such as employee assistance programs with disability coverage or travel assistance services with term life insurance packages. These services offer additional benefits that the employee would not have without the insurance coverage. Not only are value-added benefits attractive to employees, but they also provide employers with a tool to help recruit and retain top talent.

Employers are looking for ways to simplify complex life insurance worksite benefits. Providers are simplifying the products and adding flexibility by requiring less administration for employers and fewer payments for employees. Along with simplifying products and adding flexibility, many providers are customizing the enrollment process for clients. They are also providing benefit education through group meetings, telephone response systems, benefit kiosks, pre-enrollment packages, and interactive intranet and Internet Websites. Providers are communicating with employers and employees to provide increased coordination support.

When selecting a provider for voluntary and worksite business, employers should look for the following:
• An eye on marketplace demands.
• Outstanding financial ratings.
• Strong contracts with provisions that are favorable to employees.
• Expertise in the ancillary business.
• A local market presence.
• Superior service that exceeds customer needs.
Small employers said that the most important factor in their decision to offer voluntary products was to save money over employer-paid benefits, followed by ease of administration, and employee interest, according to a May 2007 Eastbridge study.

The keys to selling worksite benefits successfully is a needs-based approach that includes is a variety of benefits specific to each employer combined with education and service to employees. Advisors should take note of the power of cross selling to employers with whom they have an established relationship. There are several opportunities to open a cross selling conversation including the initial point-of-sale, service calls, and renewal meetings. Cross selling identifies an advisor as a trusted consultant and secures a higher percentage of client business.

In summary, worksite benefits can be used to fill the gaps in employer benefit portfolios, strengthen client relationships, and provide the total solution that employers and employees are looking for.
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Sandra Callahan is head of Group Protection Operations, Employer Markets for Lincoln Financial Group. Callahan has more than 20 years experience in the financial services industry. As head of operations, she has management responsibilities for more than 800 employees providing operational, risk, financial and client services in the Omaha, NE and Atlanta, GA locations. Lincoln Financial Group is the marketing name for Lincoln National Corporation and its affiliates. Employer Markets is a division of Lincoln Financial Group. For more information, call (800) 237-3813.