The time is right for multi-life sales

"Multi-life disability income insurance is marketed most frequently by sales representatives who specialize in the employee- and executive-benefits arena," Ameigh notes. "The sales process involves working with company benefit managers to identify gaps in employer-sponsored disability programs such as long-term disability. When combined with other group benefits, multi-life disability income insurance improves the quality and coverage level provided to employees. It's usually most beneficial to key executives who are highly paid and subsequently under-insured by the standard benefits provided to rank-and-file employees.

From the employees' side of the equation, family needs are also driving demand. According to the third annual Axa Equitable Life Insurance Company's Retirement Scope survey (2006), 95 percent of working Americans believe the Social Security system is in trouble. That indicates that demand to provide income security and protection for a ballooning retiree population is growing, as is the need to provide various forms of long term care to this aging population.

LTC Financial Partners of Kirkland, Wash., pitches human resource professionals by offering in-depth long term care education for employees, as well as free in-home cost evaluations. "We make it available to every employee, spouse, family member and retiree," says Dan Cahn, senior vice president at LTC Financial Partners. The company recently hosted a Web-based seminar that drew some 300 human resource professionals. The company generally enjoys 50 percent sign-up rates at presentations.

"The cost of employee caregiving is a big risk for employers," says Ron Hagelman, a benefits consultant in New Braunfels, Texas. Nearly 22 million American workers are currently caregivers for parents or loved ones, according to a study conducted by the National Alliance for Caregiving and the AARP. The MetLife "Study of Employer Costs for Working Caregivers" estimates that accommodating caregivers costs U.S. employers between $11.4 and $29 billion in lost productivity.

The Family Medical Leave Act (1993) gives workers up to 12 weeks a year of unpaid leave to care for a family member. It does not assist those who cannot afford to take leave or pay for a professional caregiver. There are also restrictions depending on company size and amount of time employed. Those with long term care insurance for themselves and/or a close family member are more than two times as likely to continue working than those caring for a non-insured person. Private insurance enables families to afford professional caregiving.

Hagelman says he believes more companies will offer such benefits as employee demand grows. "Long term care is a form of asset protection," Hagelman argues. "The cost of caregiving generally rises as a person ages. This is often when they need to protect employee assets and income."

The leading objection to purchasing LTCI is the cost, according to the Connecticut Partnership for Long-Term Care. It suggests that most of the successful employer offerings have been those where the employer has contributed to premium cost. Employer contributions to LTCI were made easier in 1996 by federal legislation, which allowed LTCI to be treated in the same manner as health and accident insurance under the federal tax code. An employer contributing towards employees' LTCI premiums can deduct contributions in the same way as those for health insurance. While LTCI cannot be included in a "cafeteria" or flexible-spending plan, the tax provisions provide employers with incentives.

LIMRA recently reported that the U.S. small business market is "ripe for growth of employee benefits, with about 10 percent of the nation's small firms potentially poised to add benefits or offer them for the first time." In "Growth Potential of the Small-Business Market" (2006), LIMRA reported that the current tight labor market, relatively low penetration for group life, health, and retirement benefits and general economic trends will encourage small businesses (those with up to 99 employees) to increase offerings. The skills needed to penetrate the multi-life market are similar to those often associated with more traditional one-on-one techniques, according to MassMutual's Stratidis, but there are unique challenges as well. "Skill proficiency from the individual marketplace translates well into the multi-life area," he says.

"The shift needs to move from the one-on-one 'kitchen table' approach to those mediated by companies, associations, and other groups," Ameigh says. "With new incentives, we're going to be reaching the other 90 percent. But that can't happen quickly except through a multiplier effect."

Senior advisors can enter this potentially rewarding area by communicating the benefits, working with like-minded professionals offering complementary services and by anticipating needs and working to fill them. But what works with one client might not with another. Items like company size and structure, as well as culture, each play a role. A success at a small company can be problematic at a larger one – and the reverse also can be true.

Experimentation with one's approach is necessary to cultivate multi-life sales. It also can be helpful to gather professionals with different skills and backgrounds. Sharing knowledge and rewards together with carefully designed programs and the right technology and marketing support can open doors, but it's vital to remain at the center of any new relationships.

"Employees want more benefits," Stratidis says. "They see the need for them." The employer can make it more attractive than getting it on one's own, plus they can benefit with greater retention and loyalty. If there ever was a win-win situation for our industry, multi-life sales may be it.