Several industry research bodies suggest voluntary benefits and services will emerge as a boom market for producer sales in the next five years, according to a January 6 article in Insurance Business America magazine.
According to the Towers Watson 2013 Voluntary Benefits and Services Survey, the importance of voluntary products in a company’s rewards strategy will grow 27 percent in that timeframe, while nearly 90% of producers surveyed by Eastbridge Consulting Group said they expect sales of voluntary benefit plans to increase.
While the most common voluntary products like vision, dental and disability will continue to see stable sales, however, Towers Watson said the following three are the ones to watch in 2014.
If you’re not already offering these plans, now may be the time to make a concentrated push for clients looking to expand their rewards strategy in a cost-effective way.
Critical Illness – Towers Watson expects affordable medical benefits like critical illness or accident insurance to increase in sales in the upcoming two years. The survey found 8 percent of respondents plan to introduce a critical illness plan in 2014 and another 13 percent are considering such a plan in 2015. Accident plans are already popular, but another 9 percent of survey respondents said they are considering adding one by 2015.
Financial Counseling – Nearly 20% of respondents told Towers Watson they were considering adding financial counseling benefits within the next two years, particularly during this fall’s 2014 enrollment season. Towers Watson expects employers will want to increase workers’ retirement and personal finance knowledge as the burden of financial planning falls increasingly to individuals, who pay as little as $5 to $20 a month for such benefits.Financial counseling can even be paid solely by employees through payroll deferral, meaning no cost for employers and increased ease and peace of mind for workers.
Identity Theft Protection – With widely publicized cyber breaches like the ones that afflicted Target and Snapchat this holiday season, identity theft protection is going to be a hot item in 2014. In fact, a recent poll from LifeLock indicated nearly 60 percent of producers have fielded requests from commercial clients on identity protection benefits. Like other voluntary packages, identity theft protection is available at a generally low cost to employers. Average coverage ranges from $7 to $20 a month, with most policies offering coverage of up to $1mn.