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Group Term Life Enrollment Trends for 2014


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Current trends in Group Term Life Enrollment based on Gen Re's U.S. Group Term Life Rate and Risk Management Survey as well as insights shared by participants during breakouts held on a variety of related topics – Enrollment, Employer/Employee Dollars, and Mortality and Exchanges.

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Group Term Life Enrollment Trends for 2014

  1. 1. Group Term Life Feedback from the Gen Re survey and roundtablediscussions Enrollment Trends For 2014
  2. 2. Thoughtson OpenEnrollment in the U.S.:
  3. 3. Definition varies in the market true open enrollment Modified open enrollment
  4. 4. Open enrollment is used to maximize participation, particularly with multiple voluntary products.
  5. 5. There is a greater possibility of open enrollment with smaller groups or cases.
  6. 6. There is pressure to offer open enrollments on in-force business; if those clients were to switch carriers, they would likely be offered the option of open enrollment.
  7. 7. Even for in-force enrollments, it is very rare for a group to have the systems or tracking information to be able to produce a list of previously-declined employees.
  8. 8. Group Life EnrollmentPractices Minimum Participation Requirements
  9. 9. Continue When participation is low (or not met) the carrier feels like they are limited in terms of recourse. Waive participation requirements and proceed with implementing the deal as is 21 3 Revert to fully-underwritten requirements Handle enforcement on a case-by-case basis
  10. 10. When participation is low (or not met) the carrier feels like they are limited in terms of recourse. Enroll sold products in different enrollment cycles 5 64 Impose penalties and/or enforce conditions Examples: Require employer to contribute more toward the basic employer paid rate Have all employees complete an application up front - waive if participation is met or process the apps if not Reduce multi-year rate guarantee period Hold a follow-up enrollment (e.g., in 6 months or within first year) Though the “textbook” scenario may call for walking away from the deal, in real life the carrier will most likely not reject the case.BottomLine
  11. 11. Continue Carriers may decide to waive minimum participation requirements, basedon:
  12. 12. Carriers may decide to waive minimum participation requirements, basedon:
  13. 13. A carrier's concern for participation from a business perspectiveis different than the employer's concern from a Human Resources perspective. *Source: Gen Re/Spring Group Voluntary Pulse Survey get more volume Givemore options Carrier HR
  14. 14. To improve participation levels, carriers may: Stipulate method of enrollment, e.g., face-to-face Use carrier's enrollment team Analyze case demographics up front to develop enrollment strategy Use web-based, "Avatar"-type educational technology Phase additional products year- by-year vs. overload in year one Leverage the involvement of payroll company Set clear expectations with sales force to instill accountability for following through with low participation consequences       
  15. 15. Survey Results Standard Enrollment Practicesfor a Takeover Case Voluntary Group Life Insurance Low ParticipationGroup- 39% said they would require Evidence of Insurability(EOI) forany new amount. High ParticipationGroup - 50% of respondentssaid theywere more willing to waive theEOI for any newamount. Only 6% of respondents were willing to waive EOI for one-levelincreases. 39% 50% 6%
  16. 16. Survey Results Standard Enrollment Practicesfor a Takeover Case Supplemental Group Life Insurance Anti-selection concerns with the removal of EOI at enrollment are greater for groups with higher participation levels and individuals who have previously declined coverage. Conclusion Low ParticipationGroup- 21% of respondentswould allowa one-levelincrease withoutEOI forthose already participating. High ParticipationGroup - 11% of companies allowed a one-levelincrease withoutEOI forthose already participating. No companyallowed SupplementalInsurancefor new participants withoutEOI. 21% 11% 0%
  17. 17. Survey Results Enrollment Methods Voluntary Life enrollees used the followingmethods to elect coverage: 2% 3% 3% 3% 3% 7% 4% 6% 9% 8% 14% 25% 26% 35% 32% 22% 25% 30% 0% 2% 1% 13% 2% 3% 65% 51% 51% 51% 52% 35% 0% 3% 3% 3% 4% 0% 2007 2008 2009 2010 2011 2013 Carrier’s Website Employer’s Website Group Enrollment Meetings One-on-One Enrollment Sessions Paper Form Only Telephone R=10 Over time, more employees are using the employer’s website and fewer employees are using paper forms. Utilization of telephone enrollment seems to have disappeared entirely.
  18. 18. Survey Results Spouse Coverage Do you allow a spouse to enroll if the employee does not enroll? R=18/19 Do you allow a spouse to purchase a higher amount than the employee? Voluntary Supplementary Voluntary Supplementary 28% 26% 17% 16% 72% 74% 83% 84%
  19. 19. Tolearn more aboutGroupTerm Life Reinsurance,contact: Mike Fullerton p +1 207 347 4636 e in /in/mfullerton1 Tolearn aboutadditional enrollment trend researchthatGen Re is planningand to determinewhetheryourcompanyshouldparticipate, please contact: Marcy Updike p +1 207 347 4626 e in /in/marcyupdike © 2014 General Re Corporation | This presentation is intended to provide background information to our clients and professional staff. It is time sensitive and may need to be revised and updated periodically.