The Rationale for Selling Voluntary Benefits
The path of least resistance sometimes leads to success. Consider the expanding market for voluntary benefits, for instance.
Employers say they are looking for help from financial advisors with sorting through their voluntary benefits needs, according to a study by MassMutual. The 2015 MassMutual Benefits Advice Study1 finds that 39 percent of employers without an advisor would find guidance regarding voluntary benefits from an experienced financial professional “extremely valuable” or “very valuable.” Voluntary benefits include retirement plans, life and disability insurance, critical illness and accident coverage, and other protection benefits.
But what about employers who already rely on an advisor? More than half (53 percent) of these employers rate the advice they receive on voluntary benefits as “excellent” or “very good” and 77 percent rate it as “good” or better, according to the study.
The study, conducted by Greenwald & Associates as part of a broader research project, surveyed 565 U.S. employers of different sizes ranging from fewer than 25 employees to 1,000 or more employees.
Advisors report that employers are increasingly looking for help with voluntary benefits as their employees’ personal financial needs become more complex. MassMutual’s Benefits Advice Study1 shows that advisors with the appropriate knowledge and expertise may have a clear and compelling opportunity to expand their financial practices to offer at least some guidance about voluntary benefits.
How? Voluntary employee benefits options.
Offering voluntary benefits has the potential to help you increase your business’s revenue streams and maintain your competitive edge as more employers look for guidance about what benefits are most appropriate for their employees. And offering voluntary benefits doesn’t just have the potential to help you – it can help your clients and their employees, too!
You may know about voluntary benefits – employer-offered, employee-paid products such as life, disability, accident, and critical illness insurance, as well as things like pet insurance, identity theft protection, and more – but they may not necessarily be part of your current lineup. Maybe you’re not comfortable offering something different. But if you opt not to offer voluntary benefits when there is a clear need, you’re potentially doing both yourself and your clients a disservice.
You’ve seen the shift in the benefits landscape over time, from employer-provided to employer-enabled retirement benefits, from full healthcare coverage to high-deductible healthcare plans and HSAs. Increasingly, employers are making benefits available on a voluntary basis, meaning employees are shouldering most if not all of the costs.
Now more than ever, most workers in America are being asked to figure out what benefits they need and how best to spend their limited benefits dollars. Yet, 38 percent of workers say they know little or nothing about their employer-provided benefits and half (49 percent) say they don’t know how much money they should spend on those benefits, according to the 2015 MassMutual Employee Benefits Security Study2.
As an advisor, you can help – and holistic-minded benefits tools like MassMutual’s MapMyBenefitsSM may be available to make the process easier. The MapMyBenefits tool not only helps educate employees about their benefits, it can help them prioritize their needs based on the information that the employee provided about his or her personal family and financial circumstances, making the most of each benefit dollar.” The priorities are based on more than 200 personas or profiles of consumers developed by MassMutual.
Helping employees make better benefits decisions may also help employers boost productivity. Consider that MassMutual’s Benefits Security study found that 38 percent of workers say that personal finances are a distraction at work. Helping alleviate those concerns can help employees focus more on the job.
As an experienced, trusted advisor, you have the opportunity to transform your practice in a way that benefits you, your sponsors and their employees. You may be able to add greater value and increase the likelihood of client retention by helping your sponsors offer more comprehensive benefits programs that enable employees to best determine how to spend their limited benefits dollars by using the MapMyBenefits tool.
Moreover, you can potentially insulate your business against competitors who do offer a broader selection of benefits, including retirement plans and insurance protection products. All it takes for a competitor to crack open the door to your clients’ retirement plans is to offer a voluntary benefit that you don’t. Of course, advisors must obtain the appropriate insurance licenses to sell voluntary benefits.
As your clients’ trusted advisor, expanding your practice to offer voluntary benefits enables you to build upon that trust and expand your existing relationship. It may be a good way, depending on your specific circumstances, to expand your business, enhance your value, and help more Americans make sense of their benefits options and retire on their own terms.
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Jonathan Shuman leads sales of workplace benefits for Massachusetts Mutual Life Insurance Co. (MassMutual).
12016 MassMutual Benefits Advice Study, https://wwwrs.massmutual.com/retire/newsplus/onlinenews/rs38934.pdf
22015 MassMutual Employee Benefits Security Study, https://www.massmutual.com/~/media/files/MM-EE-Benefits-Security-Study-Report.pdf