The redesigned product covers a broader range of conditions than standard CI products, including infectious diseases, Parkinson’s, dementia and Alzheimer’s, multiple sclerosis, amyotrophic lateral sclerosis (ALS, often called Lou Gehrig's disease) and more. CI coverage of infectious diseases and MS are new to the marketplace, based on LIMRA research, while Parkinson’s, ALS, Alzheimer’s and dementia are less common but not new.
Unum defines a critical illness life-stage as a three to five year period, which confines coverage to a brief period in a patient's life instead of more traditional lifetime coverage
Employees who sign up for this plan receive a lump sum when diagnosed with a covered condition. The addition of this new product, along with Unum’s employer-paid group hospital insurance (GHI) released earlier in 2018, signals an effort to provide deeper value while also protecting more people from the high costs of unexpected illnesses or conditions.
A more flexible CI product design recognizes the sheer number of serious health conditions that may cause a significant financial burden, but it also takes into consideration changes in earnings or huge anticipated expenses such as a child’s college tuition, notes Ashley Mehrer, assistant VP of product and market development for Unum.
The life-stage aspect recognizes employment trends, she adds. An attained-age rated product that grows over time makes more sense, she says, than an issue-age level product for individuals who change employers every 5 to 10 years. Also, experts find that policyholders “typically keep coverage for 3 to 5 years during the life stage they think they need it most rather than a whole lifetime,” Mehrer says.
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She likens the new CI product design to the term vs. perm life insurance discussion about the pros and cons of buying a term life or whole life policy. “It allows for a lower price point on a kind of apples-to-apples basis, so those buying in younger will have more affordable coverage, but their rates will go up over time,” she explains.
Another advantage in terms of combining CI and GHI coverage is it can help employers increase participation in a high-deductible health plan by easing employee concerns about huge out-of-pocket costs related to hospitalization. A $10,000 minimum lump sum benefit represents a much bigger payout that supplements medical insurance and complements disability coverage, according to Mehrer. She says about 1 in 15 employees on average are hospitalized each year.
Unum’s recent moves are capturing the attention of brokers and advisers. Josh Roland, regional ancillary benefits practice leader for OneDigital, believes the redesigned CI product and addition of attained-age pricing places it in the industry’s top 1% best CI contracts.
“The future of CI is in this pricing structure,” he observes, “especially when the carrier allows employees to buy up to the guarantee issue limit at each open enrollment without EOI [evidence of insurability] as Unum can now do with its latest offering.”
Among the contract provisions of this new offering that caught his eye: 100% automatic coverage of five specific childhood conditions alongside ALS, MS, Alzheimer’s, Parkinson’s, occupational HIV and hepatitis B, C or D. Roland also points out coverage for several other areas that include loss of hearing or speech, as well as key features involving 100% reoccurrence and no policy lifetime maximum payout limits.
“Many other carriers offer some of these policy provisions,” he explains, “but Unum combines them all into one super-contract, along with traditional coverage for heart attack, stroke, cancer, end stage renal failure, organ transplant, paralysis, coma, blindness, etc.”
From an even larger perspective, Roland says the CI upgrade now places Unum in the top tier of total absence management providers. The key components of this mix include coverage for family medical leave and the Americans With Disabilities Act, state or local leaves of absence, military and corporate leaves, of absence, short- and long-term disability, basic, voluntary or whole life, accidental death and dismemberment, accident, CI and hospital indemnity.
“With the next frontier being the integration of wellness programs into life, disability and voluntary benefits, I expect Unum to continue leading the innovation charge,” Roland predicts.
Unum’s enrollment and billing capabilities not only “ease the employer administrative burden,” he adds, but also elevate the carrier’s position relative to competitors. “This is often a weak point of newer players in CI as they rush their products to market at the expenses of administration excellence,” according to Roland.
He believes far too many carriers, and brokers for that matter, focus on low price over contract and admin strength. His larger point is that “a few dollars saved per paycheck is not worth the pain of low value at claim time. It is a terrible thing to overpay for voluntary benefits, but it is an equally terrible thing to underpay for them.”
