Choosing Voluntary Products and Carriers: Balancing Price and Value

For brokers, administration and service are key considerations when choosing a trader, topped only by product features and benefits. (Image: Cifotart/stock.adobe.com)

“In for money.” It’s a cliché because it’s true. Whether you’re choosing a restaurant, starting tires on a new car, or trying on shoes, your purchasing decision matters more than price.

The same goes for when deciding which carrier voluntary product to offer your customers. Price is an important consideration in keeping the benefits package affordable for employees, but defaulting to the cheapest option may not be the best choice.

Related: Positive Outlook: 8 Voluntary Benefit Trends

Instead, look for the product that offers the best value. Some of the important factors to consider are:

Nick Rockwell, Eastbridge Consulting Group, Inc. Nick Rockwell, Eastbridge Consulting Group, Inc.

Benefits and Features — Does the product meet the needs of your client’s employees, given the demographics of the workforce and other benefits the employer already offers?

Cover level — Can the product provide the amount of coverage employees are likely to need?

Subscription options — Does the product offer competitive guaranteed issue underwriting or could it be difficult for employees to qualify for coverage?

Once you’ve checked those boxes and determined that the product meets your customer’s basic requirements, there’s another set of questions to ask:

Does the carrier offer excellent administration and service? A recent BenefitsPRO/Eastbridge Consulting Group survey of voluntary benefits producers shows that 41% of brokers believe that administration and service are key considerations when choosing an insurer. In fact, it is the second most important factor, topped only by the features and benefits of the product. Key aspects of administration and service include accurate billing and self-service options for your customers to make changes to their policy.

What is the carrier’s reputation for claims? Prompt and accurate payment of claims is a key driver of customer satisfaction, and claims processing times vary widely by carrier and product. For example, a recent Eastbridge survey shows that most carriers pay voluntary claims within 10 days, but the average turnaround time for a more complicated product like critical illness ranges from two to 90 days. In the same survey, only about half of carriers say they offer an “express-pay” type of claim payment, typically for life or wellness claims, and only a few offer express-pay for other products such as disability, cancer, accident and hospital allowance.

How will you register the product? Ask if your client’s benefits administration system can handle the product. If not, see what other solutions the carrier has for this situation. Nearly 4 in 10 brokers who participated in our survey cite a carrier’s ability to integrate with an employer’s registration and administration system as the most important factor in choosing a carrier.

If the carrier you’re considering meets all of these criteria, you’re well on your way to making a solid, value-based decision. But you’re not quite done. A product only brings value to your customers and their employees if they can understand it and how it helps close gaps in their financial protection and, therefore, enhance their participation.

In our next article, we’ll talk about balancing rich perks with the need for products that employees can actually understand and buy.

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