5 Top Trends In Accident Insurance

By David Polen

If I asked you to name a billion-dollar-selling employee benefit, accident insurance might not be the first to jump to mind.

But it is: $1.1 billion in premium last year, to be exact. Eastbridge Consulting Group reports voluntary accident insurance is an increasingly popular employee benefit, with sales surging nearly 40 percent between 2013 and 2017.

That’s because accident insurance has continued to evolve to meet the changing needs of today’s consumers, from millennials entering the workforce to baby boomers preparing to retire. Here’s a look at five ways accident insurance is morphing to keep its spot as a must-have employee benefit.

1. Richer benefits.

The newest plans have been refreshed to pay more. Many insurers have refreshed their accident policies to provide greater benefits to policyholders for covered injuries. Simply put, accident insurance offers more value than ever before.

2. Greater flexibility.

This goes beyond offering two, three or four levels of coverage to meet different employee budgets. Newer accident plans include a selection of employer-optional benefits, such as a wellness benefit for health screenings or a hospital confinement benefit for a covered sickness, or higher benefits for sports injuries or even gunshot wounds.

These benefits expand employers’ options so they can customize the coverage for their employee population. For example, a city or county government employer might select the higher gunshot wound benefit because its employees include police and other emergency workers. The sports injuries benefit appeals to workers with active families. In fact, the latest version of that benefit is sometimes called “active lifestyles.” Those who select it are eligible for higher benefits, whether the covered injury happens on the ballfield as part of an organized sports activity or in the yard at home playing tag.

3. Emphasis on family coverage.

The stereotypical buyer of accident insurance is a man in his 30s or 40s buying coverage for himself. And our company’s sales results prove this out. But close behind is family coverage including children — and step-children. With up to 50 percent of marriages ending in divorce, there are more blended families in this country than ever.

One of my co-workers found the value in his family accident plan when barely 24 hours after saying “I do” with his second wife, her teenage son — now his new step-son — broke his ankle playing football. Isn’t that the call you’d love to get as you’re leaving on your honeymoon? But the good news is the budding gridiron star was covered, even though he wasn’t in the picture when the plan was first purchased.

4. More group plans.

The increased interest in accident insurance has lured new players into the market, including some carriers that haven’t traditionally offered voluntary benefits. These carriers tend to gravitate toward group plans because of their lack of expertise in individual platforms and because brokers are often more familiar with — and therefore comfortable with — group products.

More competition is often good for consumers, but it also can increase the burden on you. It becomes more important than ever to closely evaluate the carriers you choose to work with to make sure they have the experience and expertise in voluntary employee benefits to best serve your clients. In addition, a group plan may not always be the best fit for all of your clients. A partner that offers both individual and group products gives you a wider range of solutions.

5. Greater need.

America’s workers are becoming increasingly financially fragile. Only 39 percent have enough savings to pay an unexpected expense of $1,000, according to Bankrate.com. At the same time, Milliman’s 2017 Medical Index found an average family has more than $4,500 in out-of-pocket medical costs each year. That math doesn’t add up.

Some of this gap is no doubt caused by the growth in high-deductible health plans, which require deductibles of at least $1,350 for an individual and $2,700 for a family. HDHPs are increasingly popular as employers scramble for solutions to control rising benefits costs and keep premiums affordable for their workers. The downside is these plans increase the potential financial exposure for employees. Voluntary accident insurance to help pay for the unexpected costs of an injury can play an important role in their financial protection.

More value, more flexibility and more options - accident insurance is continuing to evolve to meet the needs of today’s consumers to protect their families, their finances and their futures. If you don’t have accident insurance in your portfolio of solutions — or if it has been a while since you’ve looked at what’s new — there’s no better time than now.

David Polen is a director of product and market development at Colonial Life & Accident Insurance. David may be contacted at [email protected].

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