The Advisor's Guide to Group Life and AD&D Insurance by Thomas C. Kirner

Author:Thomas C. Kirner
Language: eng
Format: epub
Publisher: The National Underwriter Company
Published: 2012-12-20T00:00:00+00:00

Figure 8-3 provides an illustrative chart where the underwriter would likely be uncomfortable with the richness-of-benefits balance between basic and supplemental life.

Considering the average annual salary of employees in Figure 8-3, most of the employees would probably feel they have adequate coverage under basic life at 3 times annual earnings and would not be inclined to enroll in the supplemental life program.

Another technique that can be applied to increase supplemental life participation is to request that the policyholder make the basic life plan partially contributory and apply that portion of employer contributions to the supplemental life plan, thus reducing the supplemental life rate for employees. If the basic life premium is only modestly contributory, most employees are likely to remain in the plan. And with the supplemental rate now reduced for employees, they will be more likely to enroll in supplemental life. Although this is unusual, it can help provide balance between basic and supplemental life enrollments. Figure 8-4 provides an example of how a modest change to the contribution structure would work.

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