By Cyril Tuohy
With the voluntary benefit market enjoying strong premium growth and a “staggering” gap in income protection among American workers, Unum has announced the launch of new disability insurance coverage the company says is simpler and more flexible.
Unum’s newest plan designs are voluntary, which means the plans allow employers to make coverage available to their entire workforce and designed to let employees choose from the coverage options at group rates, the company said in a news release.
Employers choose to offer short-term disability, long-term disability or both. Employers also decide whether the premiums are shared between employer and employee or whether they are 100 percent paid by the employee, the company also said.
The latest market data from Eastbridge Consulting’s annual U.S. Worksite/Voluntary Sales Report issued last year estimated 2013 voluntary and worksite benefits sales at $6.64 billion, an increase of 10.1 percent over 2012.
Kathy Plummer, director of disability product development, said in a news release that while surveys show that only one-third of workers have access to disability benefits at work, nearly all employees say they want disability coverage to be available.
“The newest addition to our disability product portfolio will help employers bridge this gap,” she said.
In the voluntary market, the premium is often 100 percent employee-paid. The employer makes the product available through the workplace, via a payroll deduction, and the employee benefits from buying the coverage through a group rate.
As employees shoulder a greater financial burden for health insurance through higher deductibles and copayments, voluntary coverage products fill the gap. Other products some companies make available on a voluntary basis include hospital indemnity and critical illness coverage.
Even nontraditional voluntary products are making their way into the options available to employees. These include auto/home insurance, identity theft insurance, discount plans, legal plans, purchasing programs and pet insurance.
Citing a Consumer Federation of America survey, Plummer wrote that nine out of 10 workers think all employers should offer disability insurance, 56 percent said they would pay the premium, and 86 percent said they would be willing to pay half the cost of the premiums.
Voluntary benefits are moving from a “nice to have” to a “must have” benefit if employers want to keep up with changing employee demands, according to voluntary market experts.
As a result, carriers are expected to introduce new and revamped voluntary benefits this year, voluntary market experts also said.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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