The need for additional Life Insurance for today’s working Americans is compelling. Consider the following from the front cover of USA Today on Dec. 3, 2010:

“Millions of Families Missing Safety Net.”

“The percentage of U.S. households with Life Insurance is at its lowest in 50 years.”

 “Only 44% of households have an individual life insurance policy.”

And there are fewer insurance agents. Also from USA Today:

“Nearly 80% of families don’t have a personal life insurance agent or broker.”

The number of insurance agents in U.S. is “184,873…down from more than 246,000 two decades ago.”

The 20% of families with a life insurance agent or broker are higher income professionals such as physicians, lawyers and business owners or executives

Access to Quality Life Insurance for middle and lower income families has disappeared over the past 10 to 20 years

The stark reality is that employer sponsored plans are one of the only realistic ways left for the acquisition of life insurance protection for the majority of American families

Consider The Wall Street Journal story “Shift to Wealthier Clientele Puts Life Insurers in a Bind,” [Oct. 3, 2010]: “But in a development all but unnoticed outside the industry, life-insurance companies gradually have shifted away from their broad historical base of middle-class households. Instead, statistics show, an increasing portion of insurers' business consists of selling large policies to wealthier Americans, often as part of complex estate-tax plans.”

It’s clear the average American has been abandoned by the traditional life insurance industry. So realistically, who has “access” to life insurance today?  If you’re a doctor, business executive or owner or lawyer the idea of life insurance agent calling isn’t a positive thought. If your low or middle income, you probably have never had one contact you and you would like to speak to someone about life insurance.

Supplemental group term is a terrific benefit in many ways and provides valuable protection but what happens if they employee terminates or retires? Good luck with underwriting process for life insurance after age 50. Today the majority of employees with retirement on their horizon don’t truly “own” life insurance. Most Group Term coverage is “convertible” but only at cost prohibitive prices. In addition, any employee group term coverage that’s converted is typically “charged” to the clients plan experience and will likely negatively impact group term rates at renewal.

The perception among many older employees that have considered life coverage is they no longer qualify due to age or health conditions. That’s not necessarily the case if a group life alternative is offered to entire employee population because of group underwriting that’s available today. I started enrolling voluntary life insurance in 1983. One thing I have learned….virtually no one wakes up one morning and says “I think I will buy some life insurance today” unless they were diagnosed with something that’s disturbed them and created some level of awareness of their life insurance needs.

I suggest you take a little extra time and talk to your clients about adding a new voluntary life benefit this fall. Employees need and want it. Their employer is in many ways is the only place they will have access to an alternative life insurance coverage that’s there we they need it the most. In addition, the compensation is usually very attractive for the producer and/or advisor.

Kelly is chief executive of Nashville, Tenn.-based Voluntary Employee Benefit Advisors. He can be reached at Tkelly@VEBA1.com.

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