Unum Select
Unum’s latest initiative in the group risks market, Unum Select, is an inclusive group risk plan that aims to expand the group risk market. It is available on Standard (traditional employer funded group risk) or Voluntary bases.
The plan enables employers to have life, income protection and critical illness cover within one group risk plan. The most significant factor is that the plan can be funded wholly or partly by the employer or by the employee. So, an employer that wants its workforce to have the benefit of group risk cover could set up a plan wholly funded by the employees themselves.
A core element is a worksite education programme. This provides a tailored approach to communicating with staff about the benefits being made available to them and can include group presentations, internet and phone and one to one meetings with ‘Unum Select enrollers’ - Unum staff who come into the workplace to educate the workforce on the need for financial protection and what is and what is not covered.
Unum points out that only 1 in 10 employees currently has income protection cover from its employer, while the Government is moving towards people taking more responsibility for their own welfare and protection.
Worksite marketing has been very successful in the US and, in the UK in areas such as health cash plans, but it remains an under-used distribution channel in the UK. Linking that with a choice of protection covers, ease of buying (including online quotes and administration) and a focus on employee benefits education will, Unum believes, help take group risks away from being largely limited to high earners to opening up benefits to all employees.
Within the plan, Select Life Cover on a voluntary (i.e. employee funded) basis requires ‘active enrolment’ of employees, and includes guaranteed insurability (GI, the equivalent of free cover limits on traditional group life). Up to £250,000 of cover is available (or up to twice that on standard employer funded plans, which must cover at least 75% of eligible employees). Employers can contribute a fixed monetary contribution or make a partial (up to 75%) contribution or allow employees to pay the whole amount.
Select Income Protection pays up to £36,000 a year on voluntary plans and offers a range of deferred periods, and benefit terms from as little as six months up to a maximum retirement age of 70.
Select Critical Illness Cover provides up to £100,000 on Standard plans. Spouse’s and children’s cover is also available.
Under voluntary schemes, Unum asks a ‘handful’ of health and lifestyle questions, then applies a simple accept or reject underwriting approach.
The plan is already being sold by selected IFAs, with a wider roll-out by April. The first employer to sign up to Select was Incisive Media, publisher of Cover magazine.
Plus points: Aims to expand the group risk market to a much wider group of employees through a combination of ease of access, worksite marketing and simple group risks alone or in combination; Enrollers can help IFAs get to more people more effectively; Plans can be wholly employee funded but still benefit from guaranteed insurability; Simple yes/no underwriting based on minimal information.
Not so plus points: Not every IFA likes ‘help’ from insurers as this risks losing control; Minimum levels of participation apply; Some may see this as Unum trying to make US ideas work in the culturally different UK.
Website: http://www.unum.co.uk.
Rating (max 10): Innovation: 9. Overall: 8.5. Gold.