Featured Stories:
UL secondary guarantees generate increasing risk profile
CIGNA to acquire Great American Supplemental benefits group
Janney helps RI save millions with bond issue refinancing
The emerging minority markets
Nearly half of critical illness claims begin prior to age 55
Be prepared for whatever life throws at you
Occupy, allies step up advocacy for Volcker rule, othe Dodd-Frank regs
The real cost of disease
Subject: A.M. Best Special Report:
Universal Life Secondary Guarantees Generate Increasing Risk Profile
Positive view for new NAIC draft framework to evaluate reserves
OLDWICK, N.J., A.M. Best Co. views positively the National Association of Insurance Commissioners' (NAIC) draft framework for regulatory guidelines to evaluate reserves for universal life products with secondary guarantees (ULSG). The NAIC took the first step toward resolving the AG 38 issue on February 21, 2012 when a joint working group approved taking a bifurcated approach in setting up different evaluation standards for 'closed blocks of business,' policies that were written before a specified date, and for policies deemed to be new business or those written after the decided upon date.
Concerns remain, however, over several risk factors that may negatively impact the earnings and capitalization of U.S. life companies writing these products over the near to medium term. While recognizing that the NAIC draft framework also impacts the relatively new term-UL products, this report focuses primarily on ULSG products, which have been marketed by UL carriers for more than a decade.
Access a copy of this special report. BestWeek subscribers can download a PDF copy of all special reports as well as the associated spreadsheet data. Non-subscribers can access an excerpt of each special report and purchase individual reports and spreadsheet data.
Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
May 15, 2012
ING Financial Partners Supports Female Financial Professionals
with Women's Forum Event
'Breaking Barriers to Success' commences today in San Antonio
ING U.S. will host more than 100 female financial professionals affiliated with its broker-dealer, ING Financial Partners, at the 2012 ING Women's Advisory Network Forum May 15-17, 2012 in San Antonio, Texas. The conference, themed Breaking Barriers to Success, is an opportunity for women from across the country to gather and expand their professional skills, foster business growth and network among peers in the financial services industry. Last year, women representatives affiliated with ING Financial Partners increased their new business by an average of 18% from 2010.
"It is extremely productive when women in our field can come together to share ideas, best practices and our collective passion for helping clients secure their lifelong financial security," said Bonnie Reed, Vice President of Business Development with ING Financial Partners. "The support, tools and resources women find at ING Financial Partners can help them as they grow their business. This event provides real-life examples of how women have risen to the top and shows other women the path to reach success in the financial planning industry."
Women are vastly underrepresented in the financial planning industry and comprise a tiny minority of the overall ranks. According to industry statistics1, only 14% of financial advisors are women. At the same time, there is tremendous opportunity for women to thrive in the financial services field. Research has shown that many women want to work with female financial advisors. A broker-dealer that supports the needs of women, both as professionals and as clients, can be key to helping women find their pathways to success.
A recent study by the ING Retirement Research Institute found that women face some distinct challenges when it comes to their retirement security. For example, women surveyed in the study had an average of $41,000 less saved for retirement than men. The study also found that only one quarter of the women polled had a formal investment plan to reach their retirement goals. Many women are looking for more dedicated saving and financial planning support, and female financial professionals who are attuned to their specific needs can be well positioned to serve them.
The ING Financial Partners Women's Forum will feature speakers with expertise in marketing, practice management, behavioral finance and technology. The Forum will also include numerous workshop sessions covering topics such as how to run a successful advisory practice, retirement income planning, estate planning tools, and how to work successfully with women clients.
"The workshops are really where the magic happens," commented financial advisor and ING Retirement Coach Holly Kylen. "The workshops are hosted in an interactive classroom environment where ideas, real-world examples and best practices are openly shared. If a specific technique or approach works for me, I want to share it, not just with broad-brush strokes, but with a specific roadmap to drive greater success for all women within the ING Financial Partners network."
The ING Women's Advisory Network was established in 2005 to support the needs of women financial professionals affiliated with ING Financial Partners. The Network provides ongoing training, mentorship, networking, learning activities and the annual Women's Advisory Network Forum event.
ING Financial Partners, part of the ING family of companies, is a broker-dealer with more than 2,500 independent representatives nationwide.
May 11, 2012
Cigna to Acquire Great American Supplemental Benefits Group
Acquisition Further Extends Cigna's Capabilities in the Individual and Seniors Market
- Cigna Adds Industry Leading Supplemental Benefits Solutions Provider to Its Existing Individual and Senior Businesses
- Scalable Product Portfolio and Platform Highly Aligned with Expanded Consumer Strategy in a High Growth Segment
- U.S. Supplemental Market A Natural Extension of Cigna's Global Health Life & Accident Business
BLOOMFIELD, Conn., - Cigna Corporation (NYSE: CI) and American Financial Group (NYSE: AFG) today announced that they have signed a definitive agreement whereby Cigna will acquire Great American Supplemental Benefits Group, one of the largest manufacturers, distributors, and marketers of supplemental health insurance products in the United States. The transaction is expected to close during the second half of 2012 following customary regulatory approval.
"Great American Supplemental Benefits is an ideal strategic fit with Cigna's growth plans to expand our presence in the U.S. Individual and Seniors segments through a broad range of supplemental health solutions," said Thomas Richards, President, Cigna Individual and Family Plans.
The combination provides Cigna with several significant opportunities for additional growth:
- Expand individual supplemental benefits offerings to Cigna customers in the United States;
- Bring a scaled offering to the highly-attractive Seniors segment, with strong capabilities in Medicare Supplement and Other Supplemental Benefits;
- Extend Cigna's global direct-to-consumer retail channel; and
- Further enhance Cigna's diverse distribution network of agents and brokers.
"We are excited to have Great American's talented team, led by their President, Brad Wolfram, join the Cigna organization," continued Richards. "Their product portfolio and distribution channels combined with Cigna's next generation retail capabilities will further enhance our U.S. and international consumer services. We will work to create substantial value for our customers, shareholders, employees, and other key stakeholders as we extend our health solutions and services across the individual and senior segments."
About Cigna
Cigna Corporation (NYSE: CI) is a global health service company dedicated to helping people improve their health, well-being and sense of security. All products and services are provided exclusively through operating subsidiaries of Cigna Corporation, including Connecticut General Life Insurance Company, Cigna Health and Life Insurance Company, Life Insurance Company of North America and Cigna Life Insurance Company of New York. Such products and services include an integrated suite of health services, such as medical, dental, behavioral health, pharmacy and vision care benefits, and other related products including group disability, life, and accident coverage. Cigna has sales capability in 30 countries and jurisdictions, with approximately 70 million customer relationships throughout the world. To learn more about Cigna, including links to follow us on Facebook or Twitter, visit www.cigna.com.
May 8, 2012
Janney Helps Rhode Island Save Millions
With Successful Bond Issue Refinancing & Sale
Firm Served as Manager of $123 Million Rhode Island General Obligation Bond Issue
PHILADELPHIA - Janney Montgomery Scott LLC (Janney), a full-service wealth management, financial services and investment banking firm headquartered in Philadelphia, Pa., today announced the successful closing of the State of Rhode Island's $122,950,000 General Obligation Bond issue, which sold on April 24th, 2012. Janney served as book-running senior manager on the transaction. An improving outlook for the State and concrete accomplishments such as recent pension reform legislation, enacted with strong bi-partisan support, helped Rhode Island realize more than $7 million in net present value savings. Additionally, with this bond issue, the State achieved lower interest rates, relative to market benchmarks, than recent issues, reflecting improved marketability for the State’s bonds.
"This particular bond issue reaffirmed investor confidence in the State's credit, and the issue was in strong
demand by both retail and institutional investors"
"Over the past several years, our team of bankers and underwriters has worked with the government of Rhode Island and we are proud of the successful track record we've established in the State," said Tom Henson, Head of Public Finance at Janney. "This particular bond issue reaffirmed investor confidence in the State's credit, and the issue was in strong demand by both retail and institutional investors."
Janney has served as the leading underwriter of bonds and notes in Rhode Island throughout the past three years. With this bond sale, the State's first of 2012, Janney helped Rhode Island replace debt with interest rates of four to five percent with new debt whose interest rates average two and a half percent.
About Janney Montgomery Scott LLC
Established in 1832, Janney Montgomery Scott LLC provides comprehensive financial advice and superior service to individual, corporate and institutional investors. A full-service, financial services firm, Janney is committed to providing our clients advice through a wealth management approach by focusing on the delivery of strategic financial plans that utilize a variety of financial products and services best suited to help meet their financial goals. Janney is equally committed to providing our corporate and institutional clients objective advice for the successful execution of their unique business plans. Janney provides advice and service to clients through a network of professionals in branch offices located along the entire east coast. Janney is an independently operated subsidiary of The Penn Mutual Life Insurance Company, one of the largest mutual insurance companies in the nation, and is a member of the New York Stock Exchange, Financial Industry Regulatory Authority and the Securities Investor Protection Corporation.
The Emerging Minority Markets
We all smile the same
By Marcus T. Henderson, Sr., LUTCF
Mr. Henderson is President and CEO of Henderson Financial Group, Inc., in Nashville, Tennessee. He is a 20-year consecutive member of the Million Dollar Round Table (MDRT) including one Top of the Table and 10 Court of the Table qualifications.
The United States is resplendent with multicultural markets and many untapped opportunities. To break into these markets you need to be open to everyone who walks in your door, because in many cases, the majority is becoming the minority. There is an emergence of a beautiful rainbow of ethnicities, which are imminently underserved. Being a member of the Million Dollar Round Table (MDRT) has taught me that, you need to make every effort to employ and develop the most effective strategic marketing plan to cultivate a community presence.
Advising the Emerging Markets
The minority market is a unique community because most in it are attempting to adapt to the majority community. Interesting enough, the majority tries to do the same, but only when attempting to sell products and services. The buying power of the minority population is growing faster and when you sell a product to a demographic outside of your own, you stand out. You may think you don't, but you do. There are many nuances you need to understand. The most important thing you will find in any community is consumers are intelligent enough to understand when they are being 'sold' a product with ill intentions. Make sure you have a legitimate interest in their goals and protecting their families. This allows everyone to be on the same page.
The financial industry is currently making more of an effort to market to the rapidly changing landscape of prospects. Typically, insurance companies engage in top-down marketing, which includes the development of a plan of where and on what they want to focus. In most cases, it's the creation of a new brochure with an image of a particular ethnic person or family. This is ineffective and lacks personal attention to the clients. The necessary steps to succeed in a multicultural market transcend every market, but the top five ways to effectively target a diverse pool is to ensure:
You are interested in the market
Do not enter a market because you heard there is a lot of opportunity (money). Take time to research various markets to identify the one you can offer top-notch guidance. Look to parallel your interests, hobbies and natural abilities to that sector.
You understand the culture of the market.
It's key to be sensitive to a distinct market and be visible every day, face-to-face to see what's happening and impacting the community.
You can build trust within the market
Have an ambassador, attorney or CPA of a specific market introduce you to prospects. This works well, because clients have already formed a bond of trust with this person so it helps you establish credibility.
Your personality coincides in that particular market
For example, some cultures are aggressive negotiators and you need confidence to answer their questions.
You understand the products and services
Be familiar with all of the products and services, and how they apply to living in the U.S. as opposed to living in whatever native country or region your client might be from.
Recruiting Diverse Financial Professionals
People generally gravitate to others who are similar to them and some industry studies have shown demographic groups prefer to work with financial professionals with the same background. This makes it even more critical to have a diverse practice. However, the financial industry is lagging in their recruiting effort. From a practice standpoint, we have recruited representatives with almost every ethnic background. My team and I are building an organization with diverse representation to help us succeed and better serve clients in different communities.
The Language Barrier
- Advisor
Due to the emergence of multicultural markets, you need to implement an effective communication strategy. As the demographic of the U.S. changes the number of people who are not native English-speakers rises. Overcoming the language barrier is one of the biggest obstacles for a financial professional. You have to determine what approach works best for you and your client. A method I use when working with Spanish-speaking clients is to speak slower, be more sensitive and use illustrations. Images are simple and universal. It is critical that clients understand the products and services that you are selling; if you cannot provide clear and thorough explanations, think twice before engaging this market. Keep in mind that many required documents, such as prospectuses and insurance contracts may not be available in a language other than English.
- Client
The language barrier can present itself to be a challenge not only for a representative, but also for the client. It may hinder clients from being able to express their concerns in a way that the representative can easily understand. In some languages, the exact translation of a word may not be the correct way to use that word in a phrase; as a result, some clients may feel uncomfortable expressing themselves. However, numbers is a universal language that is understood throughout every language and every culture. It should be the representative's objective to connect with the client and create a comfortable environment for them to flourish in.
No matter what ethnicity a client is, it all comes down to the core of the financial profession, which is helping people develop a secure financial strategy. It's important to remember that you are an important part of the sale, because every representative typically offers the same services. Instead it requires you to understand a client's needs both culturally and professionally. This can result in a lucrative, successful career in the multicultural market. Integrating your expertise by offering suitable products and services will help you provide solutions to their financial situation. No matter what market you offer your services to, each financial plan will differ. However, in the end, the smile you receive from a gracious client who trusts your recommendations that will help safeguard their family and future is always the same.
Nearly Half Of Critical Illness Insurance Claims Begin Prior To Age 55
Cancer Remains Leading Cause Of New Claims
Just under half (47%) of new critical illness insurance claims in 2011 began prior to age 55 according to the 2012 Buyer & Claimant Study conducted by the American Association for Critical Illness Insurance (AACII) and General Re Life Corporation. This marks a significant increase in claims by younger policyholders compared to the prior year's analysis.
The percentage of claims that occurred before age 45 grew compared to 2010. Some 13 percent of male policyholders and 12 percent of female policyholders who received benefits were younger than 45 according to the data from 10 leading critical illness insurers. "The increase in younger claimants is likely due to an increase in younger buyers of this relatively new form of insurance coverage," explains Jesse Slome, executive director of the recently formed critical illness insurance trade group. "With higher health insurance deductibles and more restrictive plans, critical illness insurance is starting to gain traction among buyers in their 30s and 40s."
The study found a pronounced year-to-year increase in the number of claims paid to policyholders between ages 35 and 44. Some 8 percent of new claims by men and 10 percent women occurred at these ages in 2011, versus four percent reported by the prior year's study. The greatest decline in claims occurred after age 55.
The study revealed that cancer remains the leading cause for new individual claims accounting for 61 percent of new claims. Heart attacks accounted for 11 percent and stroke for 18 percent of new claims.
Researchers analyzed data for over 57,000 purchasers of individual critical illness insurance policies as well as claims reported by leading insurers for the time period January 1 to December 31, 2011. The American Association for Critical Illness Insurance is the national trade association providing information to consumers and insurance professionals. Free access to the organization's online learning, marketing and sales center is offered to insurance and financial professionals. For further information, visit the Website: www.aacii.org/ or call (818) 597-3205.
Summary of Finding
2012 Critical Illness Insurance Buyer & Claimant Study
New Claims Opened in 2011
Individual Critical Illness Insurance Policies
Under Age 25 25 - 34 34 - 44 45 - 54 55 or Older
Male 0 % 5 % 8 % 33 % 53 %
Female 0 % 2 % 10 % 35 % 53 %
New Claims By Reason For Claim
Cancer 61%
Heart Attack 11%
Stroke 18%
Other 9%
Source: American Association for Critical Illness Insurance study conducted by General Re Life Corporation, 2012
May 4, 2012
Be Prepared for Whatever Life Throws at You
Timely Health Insurance Coverage Tips for the Class of 2012
INDIANAPOLIS - As graduation time nears on college campuses around the country, young adults in the Class of 2012 will be faced with many important life decisions for the first time, including what to do about health insurance coverage once they leave school.
To help make the right choices, these new grads need to begin empowering themselves now with solid information about their health care options. When it comes to health insurance coverage, for example, young adults can begin by evaluating their health needs, determining their budgets and then learning what’s available to them.
Below are some tips from UnitedHealthcare's Golden Rule Insurance Compan to help young adults make the best decisions for both their health and their wallets:
- If eligible, consider staying on your parents' health insurance plan. Dependents can stay on their parents' coverage until age 26 in most cases, but it also makes sense to compare the cost of doing so vs. buying an individual health insurance plan especially if you're young and healthy.
- Determine how much you could afford to spend on a personal health insurance plan if you decide to buy your own coverage, including monthly premiums and any out-of-pocket costs for health care services and prescriptions.
- Ask questions. Solicit parents' and family members' advice, check out reputable insurance company websites or visit with a local independent insurance broker to learn the basics about health insurance, including industry terms such as 'deductible' and co-insurance.
- Consider short term health insurance plans that can offer coverage for up to 11 months. Short term plans are generally affordable, the application process is quick and simple, and they can provide coverage until you become eligible for a more permanent or employer-provided plan.
- Look into high deductible health plans. For many young, healthy people, high deductible plans make sense because they provide quality and affordable coverage at lower rates.
- If you do buy your own coverage, make sure that you can drop it at any time without penalty, especially if you expect to be covered by an employer in the near future.
- Most importantly, don't risk going uninsured. As you begin your career, it's a time in which you're least likely to be able to be saddled with costly medical bills because of an unexpected illness or injury which can happen to anyone at anytime.
A leading provider of health insurance for individuals and families for 65 years, Golden Rule Insurance Company has been a UnitedHealthcare company since 2003. Golden Rule's personal health and dental plans are offered in 41 states and the District of Columbia, and are marketed under the UnitedHealthOne brand. For more information, consumers can call 1-800-444-8990, visit www.goldenrule.com or contact a local independent insurance broker who offers UnitedHealthOne health and dental plans.
For more information about UnitedHealthcare’s products, services and consumer initiatives, visit here.
6 Red Flags That May Get You Audited This Year
Bad math, huge deductions and living large, to name a few
By Bill Losey
Mr. Losey, CFP specializes in secure retirements for women and couples over age 50. He is President of Bill Losey Retirement Solutions, LLC, an independent fee-based registered investment advisory firm. Bill is the author of Retire in a Weekend! The Baby Boomer's Guide to Making Work Optional and he also publishes Retirement Intelligence, a free weekly award-winning newsletter. Visit www.BillLosey.com.
1. A Schedule C that hints at some odd bookkeeping. Schedule Cs get a close look annually as the IRS seeks to remedy the tax gap (the difference between federal taxes owed and federal taxes paid). As Schedule Cs are often filled out by solopreneurs and small business owners themselves, the chances increase for claiming substantial deductions that may be hard to substantiate.
2. Taxable income of $1 million or more. Millionaires work with accountants for a reason, generally speaking, returns prepared by tax professionals raise far fewer red flags than DIY ones. If you will make around $1 million this year, look back at the first paragraph of this article and consider whether or not it might be wise to defer some potentially taxable income into 2013.
3. Bad math. Calculators are readily available and they can be as crucial as software when it comes to filing your federal return. The IRS does spot mediocre mathematics in returns. It has even recalculated taxes to save people money in years when special tax credits were available, such as the Making Work Pay credit. However, it also finds unreported and underreported taxable income through the same scrutiny. In fact, the IRS found 4.2 million math errors last year on tax returns for 2010.
4. Huge deductions. Is your money-losing small business venture truthfully just a hobby? Did you really donate $4,000 worth of office supplies to a charity, and do you have the receipts to back that up? The IRS routinely checks returns for deductions that seem outlandish.
5. Living large. Does the IRS peruse social media? Yes it does, just as many people do. The IRS has done good detective work for years; its investigators know to check out DMV and employment records to get a better picture of an errant taxpayer. Today, photos and posts on Facebook and MySpace and Twitter can telegraph potentially valuable nuggets of information, particularly about young taxpayers who have come into wealth that their returns don't seem to show.
6. If you're reading this, you're paying more attention than many others. That claim really isn't so grandiose, a staggering number of Americans pay scant attention to their federal taxes. According to the 2012 Taxes and Savings Survey from Capital One Bank, 11% of American taxpayers choose to file at the last minute. For that matter, about 5% of Americans (that's 7 million people) don't file federal returns at all,and in some cases, it isn't just because they don't earn enough taxable income.
Commentary
Occupy, allies step up advocacy for Volcker rule,
other Dodd-Frank regulations
Do financial institutions need limits?
By Sean P. Carr
for SNL Financial News
Last Updated: 4/24/2012
Representatives of Occupy the SEC and Americans for Financial Reform plan to step up a campaign to protect the Volcker rule, systemic risk designations and other Dodd-Frank reforms from being weakened by opposition from the financial sector, representatives said.
Both organizations held a briefing for congressional staff members in Washington, D.C., on April 23. Occupy the SEC will soon issue a comment letter urging the Federal Reserve to adopt tough standards on systemically important financial institutions. They plan to continue building support among local and state governments and other institutional investors as well as educating the public on the meaning of financial reform.
There is a "high barrier to entry" to understanding financial issues, including the Volcker rule and what it means to limit proprietary trading by banks and other financial institutions, Akshat Tewary, a corporate law attorney and member of Occupy the SEC, said in a media appearance following the briefing. One mission of the Occupy movement is to address what the Volcker rule and other regulations can do to protect Americans' savings, pensions and mortgages from irresponsible practices, Alexis Goldstein said.
"There's a lot of demand for that knowledge," said Goldstein, a former Merrill Lynch and Deutsche Bank business analyst. "I think it's something people want to understand."
Occupy the SEC, an autonomous group affiliated with Occupy Wall Street, contributed a 325-page comment letter earlier this year that argued for a strong interpretation of the Volcker rule. For the insurance sector, the Occupy letter praised a provision allowing federal officials to intervene if state oversight fails and called for mandatory state-federal consultations to enforce compliance.
When speaking with the public, Goldstein describes proprietary trading as a form of gambling. Her message, she said, is, "Do you think it is OK that these banks that got these bailouts, that have that implicit backing of the government now, are you OK with them gambling, given that they're almost like utility companies at this point?"
Reports that JPMorgan Chase & Co. has dramatically increased the risk levels of its speculative activities, to the extent that it may lack the ability to unwind its bets without taking losses or agitating the markets, is adding to a feeling in the public, if not in official Washington, that financial institutions need limits, the advocates said.
"People want tougher rules on banks," said Marcus Stanley, policy director for Americans for Financial Reform, a coalition of progressive, labor and community groups.
"It's about accountability and oversight," said Elizabeth Friedrich, a program officer at the National Federation of Community Development Credit Unions.
Another target issue, Stanley said, is the implementation of rules on derivatives trading and legislation pending before the House Committee on Agriculture that some say would weaken Title VII of Dodd-Frank. The CFTC and SEC adopted a joint rule on April 18 for part of Title VII, definitions for swap dealers and major swap participants.
"The derivatives title is a very straightforward commonsensical set of rules that is in no way extreme, but they're being presented to Congress as this red tape that the public doesn't want," Stanley said.
The Real Cost of Disease
Do You Know How Your Health Insurance Impacts Your Wallet?
By Thomas R. Giddens
Mr. Giddens joined Aflac in 1983 as assistant vice president in the Marketing department before serving in the field for more than 20 years. Visit aflacforbusiness.com
Part I in a four part series
The 10th anniversary of Money Smart Week (MSW) kicks off on April 21. Throughout the week, several states across the nation will educate consumers on how to better manage their personal finances. Industry experts will offer advice on how to increase financial literacy, including how to handle credit reports, understand social security and weather the shaky financial times.
But how many experts will be discussing the impact of health insurance on personal finances? Likely not enough.
The Truth About Medical Costs
According to the 2012 Aflac WorkForces Report, an online survey of more than 2,000 benefits decision-makers and more than 6,100 U.S. workers, 28 percent of American workers have less than $500 (51 percent have less than $1,000) in savings for emergency expenses. This is rarely enough to cover the medical expenses associated with unexpected accidents and illnesses. Furthermore, 57 percent of workers said they would have to tap into savings, 30 percent would use a credit card and 19 percent- one out of five people- would have to withdraw funds from their 401k plans to cover the costs. Additionally, 58 percent said they have no idea how they would cover the costs.
Clearly, Americans do not have the finances set aside to help with medical bills, which can sometimes pop up unexpectedly due to an unanticipated accident or illness. Not only are people not financially prepared for medical costs, but they often do not have a full understanding of how much hospital stays and medical procedures can actually cost … and what can be done ahead of time to help.
For example, heart disease is a leading killer among men and women nationwide every year. But do people understand how much this disease can actually cost someone? The estimated cost per person for severe coronary artery disease, the most common form of heart disease, is more than $1 million. And the average cost per hospital stay for heart valve disorders in 2009 was an overwhelming $36,700.
These numbers are startling, but thankfully there are ways to help people pay these expenses. One obvious answer is supplemental or voluntary insurance policies, which help with costs that major medical insurance does not cover. There is now a broad palatte for voluntary insurance policies, such as critical care, that pay benefits for covered health events such as a stroke, paralysis, open-heart surgery and much more.
Simple Benefit Solution - Voluntary Insurance
In the event of an accident or illness, policyholders receive cash benefits that are often used to help with daily living expenses, such as rent, transportation, groceries, and other necessities determined by the policyholder. Additionally, most voluntary insurance policies are portable, which allows policyholders to retain their insurance coverage whether they decide to leave their company or retire.
And voluntary insurance has no direct cost to the employer, making it an attractive solution to managing expenses while giving employees more control over their benefits decisions and access to additional coverage.
What Agents Can Do To Help
Agents can help employees confronting financial uncertainty and changes in their employer-offered health benefit options to see the big picture and think beyond major medical insurance alone. Illustrate how voluntary insurance policies such as critical care, short-term disability and accident can help employees round out their coverage, mitigate the costs of unexpected health events and help bolster their overall financial protection plans.
Reinforce the value of voluntary insurance policies to employers too. Remind them that they bear no direct cost for making voluntary insurances available to their employees, and they benefit in the form of happier, healthier workers.
Furthermore, suggest that employers implement a year-round education program regarding health benefits options. Unfortunately, people are not as educated as they should be when making their benefits elections during open enrollment. According to the Aflac WorkForces Report, more than three quarters (76 percent) of American workers admit to making mistakes about their benefits decisions in the past. And 42 percent of workers say they have wasted money each year because of mistakes they made with their insurance benefit options. Some of the common mistakes people make include misjudging how much money should be put in their Flexible Spending Account (FSA) and neglecting to elect additional insurance plans, such as dental, vision or voluntary. Taking all this into consideration, advisors should reiterate to HR Managers and business decision-makers that employees are not always fully aware of their options and how much they cost. HR needs to properly communicate benefits options to all workers year-round to help them avoid future open enrollment mistakes and protect their wallets.
The reality is that accidents and illnesses do happen, and unfortunately, they come with a price. No one is invincible, and everyone should be as financially prepared as possible when it comes to medical expenses. These unfortunate events are out of people's control, but finances are not. Americans need to know the truth about medical costs and how to pay them.