By L.M. SIXEL Copyright 2008 Houston Chronicle
Dec. 12, 2008, 10:41PM
It’s annual benefits enrollment season, and companies increasingly are stuffing their packets of offerings with more than just the usual medical, dental and vision care policies.
The workplace has morphed into a popular — and lucrative — place for insurance companies to find new customers. Instead of cold-calling prospective clients at home, agents are showing up at conference tables and lunchrooms armed with PowerPoint presentations to sell cancer insurance, prepaid funeral expenses, various supplemental coverages and other kinds policies, even for pet care.
And employers, eager to provide workers with a wider array of benefits without having to subsidize them, are welcoming them in.
“It’s becoming a bigger and bigger market as employers try to find a way to offer employees value and not incur a cost,” said Jill P. Watson, managing partner of Gallagher Benefit Services, which evaluates insurance products for its corporate clients.
Short-term disability and extra life insurance are the most popular offerings, Watson said.
As companies increase health care deductibles, boost co-pays and eliminate some coverage, the extra policies give workers more tools to prepare for the worst, said R. Kiah Townsend, Houston territory manager for Colonial Life, one of the biggest sellers of what’s known in the industry as “voluntary” insurance.
Full cost
One of the reasons Jessica Montgomery bought the three types of extra insurance the city offers — auxiliary cancer, hospitalization and accident policies — is to make sure she’s protected from the unexpected.
“So many people don’t realize that there are several things that their normal insurance won’t cover,” said Montgomery, administrative assistant for the Houston Film Commission. She pays $69 every two weeks for the extra coverage for herself and her husband.
She ticked off some of the benefits: a $1,000 cash payment on the initial cancer diagnosis, experimental treatment and lodging for out-of-state medical care.
The fear of getting strapped for cash during a medical emergency is what drives city employees to sign up, said acting human resources director Candy Clarke Aldridge.
Employees pay the full cost of the insurance, which is deducted directly from their paychecks, said Aldridge. It has been offered by Aflac since 1994 when the city’s benefits package was revamped.
Aldridge estimates about 35 percent of the city’s 23,000 employees have bought one or more voluntary plans.
‘A mixed bag’
Many of the extra policies make more sense for some workers than others. For instance, a young, healthy non-smoker might get a better deal on life insurance in the open market, said Watson, the benefits services executive. But a smoker with a history of health problems might save money with the one offered on the job.
Some of the products are loaded with commissions, Watson added.
“It’s kind of a mixed bag,” said Steve Alderman, vice president of human resources for South Texas College of Law.
Don’t miss the money
The policies cover expenses that aren’t part of typical health care plans, he said: “But as far as the percentage of people who benefit, it’s relatively low.”
For many employees, the first time they have had someone explain life insurance or disability policies is during one-on-one work-site talks with agents, said Jennifer Daniel, assistant director of voluntary sales for the Principal Financial Group in Des Moines, Iowa, who this year spoke before a meeting of benefit administrators in Houston.
For Principal, Daniel said, those individual counseling sessions are effective, doubling the number of employees who end up buying voluntary insurance to about 60 percent.
Employees also like the fact they can pay the premiums directly from their paychecks. “You don’t even miss the money, and the idea of knowing you have some extra coverage is really good if something does happen,” said Montgomery, who sat down recently with an Aflac representative to review her options.
Personal touch
That personal touch also has worked well for MetLife, whose biggest workplace seller is extra life insurance. Its homeowners and auto insurance products are popular, too.
Increasingly, employees are getting used to buying their financial protection and retirement planning products at work, said Randy Stram, vice president of employee benefit sales for MetLife in Bridgewater, N.J.
A MetLife survey found that 52 percent of employees in 2007 bought their extra life insurance and other policies at the office compared with 46 percent the previous year.
The survey, which was conducted online and on the phone, questioned 1,200 employees and 1,600 employers.
It was during annual enrollment time a couple of years ago that Judi Taliaferro enrolled in a supplemental hospitalization insurance program that would pay her $100 a day for out-of-pocket expenses.
Previously Taliaferro, director of convention services at the Greater Houston Convention and Visitors Bureau, had emergency surgery and wondered whether she could shoulder another hospital stay.
“I felt it was a benefit, and I’m getting older,” said Taliaferro, who pays around $44 a month for the coverage but isn’t sure she’ll renew it for 2009.
lm.sixel@chron.com
