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Balancing flexibility in benefits

Customization is everywhere these days. You can customize your license plate, your Starbucks order and your clothes – yes, even your socks are customizable. The world of voluntary benefits is no exception to this need for customization. Various riders on our products give employers and employees the ability to really take a product and make it their own. But, the freedom to customize is a delicate balancing act in the insurance world because of the impact it can have on cost. 

How offering options affects protection

The great thing about offering plenty of flexibility in the benefits offered and the plan design is it truly allows employers and their employees to customize their protection. Employers can choose the voluntary benefits and the riders that apply to their employees and their medical plan. Each employee is then able to pick the coverage that works for themselves and their families and tailor it to their needs with riders.

The balancing act with this is that, if you allow too many options, you may contribute to “paralysis by analysis”. A potential policyholder who is given too many options may feel overwhelmed and confused and is less likely to purchase coverage because they don’t feel confident in their decision. 

How offering options affects cost

The customization of voluntary benefits is also a tool for controlling costs. For employers, it allows them to fill gaps as needed on their medical plan and for employees it helps make sure they aren’t wasting money unnecessarily. The risk here is that if you trim too much out of a plan or don’t add many riders, you aren’t maximizing the value of the benefit. 

On the flip side, if an employee elects too many optional riders, when they see the cost of the product, they’re going to be turned off and may not want to settle for a “trimmed down” version of the product.

How do you strike the right balance?

The flexibility and customization of voluntary benefits is a great thing, but it’s not without its drawbacks. It’s certainly a case where too much of a good thing can quickly become a bad thing. So, as a broker, how do you help make sure you are striking the right balance?
  • Make sure you’re looking at products that offer real flexibility. Many products have lots of their features already built in or may only offer a few riders that don’t add the value you need.
  • Work with a carrier partner who has the experience and knowledge to help you tailor the product to your needs and who has experience in the industries in which you’re working.
Here at Trustmark, we have more than 100 years of experience in the world of voluntary benefits and are designing new products that offer unparalleled flexibility. To help our broker partners and their clients, we understand that this is the approach we need to strike a balance when customizing today’s benefit offerings.

Posted on September 27, 2018 in Sales

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