What Do Employers See In Critical Illness Insurance?
Brian Vestergaard
June 2018

As the popularity of voluntary benefits continues to take off, it’s safe to say that supplemental health products have reached the mainstream at the worksite. Newer products like accident, critical illness and hospital indemnity have gained strong footholds as go-to voluntary benefits thanks to their ability to provide relief for out-of-pocket expenses that aren’t covered by major medical plans.

Critical illness insurance in particular has become a key piece to this puzzle as a popular solution to a company’s core employee benefit strategy. According to recent studies by Eastbridge Consulting Group, critical illness sales have experienced double-digit growth at the worksite each year since 2010 —including 20 percent in 2014, 25 percent in 2015, and 13 percent in 2016.

Don’t make a mistake by overlooking critical illness coverage as part of your portfolio, as your clients may be more interested than you think. Knowing what employers value in critical illness insurance can help you better position the product as a way to strengthen your clients’ voluntary benefits packages.

A flexible solution
An unexpected illness often raises a number of questions that extend beyond health and recovery. Can a family cover their deductible and will there be follow-up care costs? Will they miss work or lose income? These questions loom large considering that major medical plans don’t always cover the full cost of treating a serious disease and given the increasing popularity of high deductible health plans.

As more employers recognize these concerns, they’re turning to critical illness coverage as a flexible solution that meets an important need for their employees. 

Here’s how it works: If a policyholder is diagnosed with a covered serious disease, such as cancer or a heart attack, they receive a lump sum benefit—regardless of any other insurance benefits they may be receiving. Benefits can be used to pay for medical deductible and copays, an uncovered medical procedure, daily living expenses, travel costs or anything needed to help with recovery. 

In other words, critical illness insurance is designed to help bridge the gap between health insurance coverage and out-of-pocket expenses. It’s an important solution that can help employees better protect their family and their finances during an unexpected illness.

Today’s critical illness products are also more flexible in terms of benefit opportunities. While early products typically covered the most common conditions like cancer, heart attack and stroke, most products pay benefits for a greater variety of illnesses, including skin cancer, prostate cancer, organ failure, organ transplants, and other coronary conditions. They can also feature benefits for the subsequent diagnosis of the same or a different covered illness, as well as health screening and wellness incentives.

An emerging recruitment and retention tool
National and state unemployment rates are nearing historic lows, which has created an extremely competitive job market. This has employers looking for an edge to compete for top talent and they see critical illness as another important tool in their recruitment and retention toolbox.

A recent study by Willis Towers Watson found that just five percent of employers didn’t include voluntary benefits as part of their employee value proposition or rewards strategy—a sizeable drop from 41 percent just five years ago.

Why the recent shift? Because voluntary benefits like critical illness insurance are what workers want! Nearly 90 percent of employees say that a benefits package is extremely or very important in deciding to accept or reject a job,1 while one in five workers has accepted, quit or changed jobs because of reasons other than salary or wage.2

And the demand for critical illness continues to grow among employers and employees. In addition to its impressive sales growth since 2010, critical illness sales represented 12 percent of all voluntary sales in 2016, according to Eastbridge Consulting Group’s annual U.S. Voluntary/Worksite Sales Report. That puts it in the top five of all voluntary products, just behind accident insurance. On the employer side, experts are predicting the percentage of businesses offering critical illness as part of their benefits package will jump from 43 percent to 71 percent by 2021.3

A business-friendly experience
Employers want to get the most out of their investment when strengthening their voluntary offerings with products like critical illness insurance. They want to know that they’re getting first-class support that makes life easier for them and their employees. And carriers have responded by shifting an emphasis to using technology to facilitate the simple, successful process that employers are demanding. They look for services such as:

  • Effortless enrollments. Many of today’s critical illness products, like other voluntary benefits, can go from introduction to enrollment in just a few weeks. Online enrollment should be simple, with product quoting and comparison, and tools like electronic signatures that allow employees to complete applications anytime, anywhere.
    For example, an e-application that allows customers to get multiple quotes and apply for three products—accident, critical illness, and hospital indemnity coverage—on just one online platform. Tools like these provide more than just an easier way to get important coverage. They also help increase participation and speed up the sales process, which grows your earning potential and productivity.
  • Better benefit communication. A strong communication plan can help an employer boost participation by engaging employees and helping them make informed decisions. A customizable plan and turn-key materials from the carrier can ease the time and financial burdens that many employers face when announcing voluntary offerings.
  • Simple administration and support. An employer’s relationship with a carrier doesn’t end with enrollment. Employers find great value in carriers that can simplify payroll deductions and other administrative functions for its HR team, as well as ensure that their employees receive the customer support they need following enrollment.

Show your clients all that critical illness has to offer
Despite its increasing demand and a growing familiarity with the product at the worksite, some employers may not yet see the full picture when it comes to the benefits of adding critical illness insurance to their voluntary offerings. If you haven’t talked to your clients about adding critical illness to their voluntary benefits package, now is the time to get ahead of the curve.

Bringing a solution like critical illness insurance to the table can position you as a trusted advisor and having it in your portfolio sets you apart from the rest of the field. Your clients will get a stronger benefits package to provide their employees with extra protection and peace of mind, while you’ll have an incredible opportunity to grow your business and create a new revenue stream.

Don’t let this opportunity pass you by. More benefit brokers are now selling voluntary benefits and employers are not shying away from adding multiple products to give their employees a greater choice in their benefits. At least two-thirds of employers now offer three or more voluntary products, and nearly 25 percent offer six or more.4 The truth is, if you don’t start talking to your clients about critical illness insurance chances are someone else will. 

References:

  1. EBRI, Value of Workplace Benefits: Findings from the 2016 Health and Voluntary Workplace Benefits Survey, April 2017.
  2. EBRI, Value of Workplace Benefits: Findings from the 2015 Health and Voluntary Workplace Benefits Survey, November 2015.
  3. Willis Towers Watson, 2018 Emerging Trends: Voluntary Benefits and Services Survey, April 2018.
  4. Eastbridge Consulting Group, Plot Points: Employers expanding voluntary offerings. February 2017.

Author's Bio
Brian Vestergaard
is vice president of Sales and Marketing for LifeSecure Insurance Company, based in Brighton, MI. LifeSecure is dedicated to helping you see insurance differently and delivering an exceptional insurance experience. The company offers accident, hospital recovery, and long term care insurance products. LifeSecure is licensed in 46 states and the District of Columbia. Vestergaard can be reached via email at: bvestergaard@yourlifesecure.com.















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