2012 Voluntary Benefits Special Report

Choice & simplicity

Unum’s voluntary strategy aimed at helping employees manage their total risks

By Thomas A. McCoy, CLU

The success of a voluntary employee benefits program comes down to that moment when an employee pauses before a computer screen, or paper application form and decides whether to put an "X" in a product selection box. The employee asks, 1) Do I have a need? and, 2) Is this a good value?

A recent study by the Consumer Federation of America and Unum answered the first question for disability insurance in statistical terms for the working population at large. The study revealed that 42% of consumers live paycheck to paycheck, and that more than 75% of consumers would face "severe financial difficulties" if they didn't work for three months because of illness or injury.

Sobering disability statistics aside, it's human nature for employees who are considering a benefit purchase to "not want to think about" falling victim to a disabling injury or illness—or to believe they can avoid it.

David Leopold, senior vice president and chief marketing officer for Unum, addresses the affordability issue of all of Unum's voluntary products this way. "Some of the foundational elements of financial protection shouldn't cost someone more than $35 or $45 a month—not including medical insurance. For our products, an individual can have a meaningful foundation for life insurance, disability, accident and critical illness for half of what you might pay on your monthly cell phone bill."

Leopold believes consumers can make better informed voluntary product decisions if they consider all their health and financial risk exposures, including those that fall outside Unum's product line. "We may be offering only life, disability and voluntary benefits as part of what we deliver; but in order to be a good consultative resource, we need to understand how all the parts of the benefits package fit together," he says.

"We don't offer a qualified health plan, but we believe our products become very important as part of the changes coming from health care reform," says Leopold. "Our sales reps and client managers are increasingly becoming better versed in how all of the components of a benefits package fit together—including both our products and the health and retirement products outside of our portfolio."

Unum's Web site provides this kind of holistic benefits education to its employees, brokers and consumers. Part of the site features significant discussion and analysis of the Patient Protection and Affordable Care Act, in text and audio format, including information on operation of the exchanges in conjunction with benefits plans. It even includes summaries of the PPACA arguments and briefs presented before the Supreme Court.

Unum uses a separate Web site—GetBenefitSmart.com—to help consumers look at all their benefits choices holistically. Here, consumers enter brief data about their life circumstances and then learn about relevant financial protection products. "It's all about answering the question, 'How do you determine the right financial protection for you or your family?'" says Leopold. "There are so many people who either don't have the right amount of financial protection or aren't given access to information to make those decisions on their own. That's where we can play a meaningful role."

Unum's recent research shows that today's consumers plan on working longer. "There's a larger range of ages and generations in the workforce," says Leopold. "The diverse workforce requires diverse choices." From a voluntary product standpoint, he cites the example of voluntary life being sold on children and grandchildren.

Bringing products successfully to this multi-generational landscape isn't simply a matter of adding more choices, he says. "Today's consumers want more choice, but if you give them too many choices, it can be overwhelming."

He likens the situation to the 401(k) retirement market. Too many investment options can make it hard for the participant to understand all the choices and make good investment decisions. Retirement plans have helped solve that problem by creating target date funds or lifestyle funds. "We try to tailor our overall benefits offerings to balance the buyer's need to understand the product with the need for a variety of products to fit their life circumstances."

Some consumers researching voluntary products at the Unum site prefer to get this information via video. They can click a video link to get product information from a "video coach." Hispanic consumers visiting GetBenefitSmart.com can utilize the site in Spanish.

To provide an employee with everything he or she needs to make benefit selections, Unum has concluded that it needs to interact with employees through three different communications channels over a period of about three weeks. "For example, it might be brochures, electronic communication and one-on-one," says Leopold.

Unum's broker force, which includes about 2,500 firms it works with regularly, plus another 45,000 it does business with occasionally, is a key partner in executing its voluntary market strategy. Its broker relationships, Leopold explains, are increasingly being defined by services and relationship connections it provides to brokers that go beyond the insurance product itself.

"That could mean connectivity to a benefits administration system. It could mean help on the benefit enrollment front—whether it's Unum bringing our own certified benefit counselors and our own enrollment platform to the table or connecting brokers with a third-party enrollment firm or a general third-party system. It could involve helping brokers find a technology partner."

Unum's enrollment procedures are handled in one of four ways—by paper enrollment, where the broker is handling the enrollment; by Unum's own enrollment platform; a third-party connected system; or a hosted environment where the enrollment platform is loaded onto someone else's system for handling and then sent back to Unum when complete.

"We want to be able to be good at any of these methods," Leopold says. "Different sizes and segments of the business prefer different enrollment methodologies. With each one we have the same underlying people, communication and portfolio available. So, it becomes a question of 'what method of enrollment makes the most sense for the employer and employees?'"

Thus, Unum's enrollment strategy mirrors the approach it takes in matching its voluntary products to employees: What makes the most sense for you and your needs?