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Accidental death and dismemberment.

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IT MIGHT NOT GET AS MUCH PRESS or employer attention as a lot of other products, but the popularity of accidental death and dismemberment insurance products remains indisputable.

Employees love it because it addresses a real need, is inexpensive and promises to take care of them (and their family) in case of accidental death--the way by which most of us expect to go. Brokers and agents love it because the products practically sell themselves--consumers need little actual selling. And carriers love them, of course, because actual claim rates remain pretty low, so the margins are higher than your average voluntary offering.

Whether packaged as a standalone group product or as a rider to a voluntary universal or term life policy, there's a pretty good chance sales will remain steady.

ACCIDENTAL DEATH AND DISMEMBERMENT IS SEEMINGLY AS UBIQUITOUS AS SAND IN THE DESERT.

Consumers see it everywhere, often without knowing exactly what it is. Their bank offers it in their statements, it has been given away at benefit enrollments to attract people to sit with an enroller, and rumor has it that is handed out at state fairs along with funnel cakes. This cheap orgy of AD&D begs the question; does accidental death and dismemberment add any value to a client's financial health and insurance needs?

Most insurance professionals would argue quite strongly that it does. Perhaps the most common use of AD&D is as a rider to various life insurance policies. Adding AD&D to a term policy, while sometimes an afterthought, is one of the most frequent tools for both a broker and an insurance carrier to provide some additional coverage to a policy holder for very a minimal cost to the policyholder. Frequently it is used to provide double indemnity in the event of a death by accident and sometimes triple indemnity if that death occurs on a common carrier such as a commercial airline or passenger train.

This very basic function, double indemnity, when explained, is a popular feature of a policy especially when coupled with receiving cash if one loses an arm, a leg, an eye or a combination of these in a freak urban threshing accident. While conceptually it has substantial popularity when marketed, and in practice when exercised, it is not overly utilized. This means that insurance carriers can keep the cost relatively low for each individual, while still increasing overall premium on a group. For example: it may cost a policyholder two dollars and fifty cents a month on a $50,000 voluntary group term policy, which certainly would be classified as affordable by most employees. If an employer group has 100 employees the carrier is receiving $250 a month in premium. Take that $3,000 a year and multiply it by a thousand employer groups that utilize that carrier's term life insurance and the carrier has an additional $3 million in premium which, alone may be a small amount in the grand scheme of premium dollars, but it certainly helps the bottom line. Of course, brokers also get commission on AD&D and it does add revenue to a broker's business.

There are questions of how much value an AD&D rider actually adds to a policy, or how much an AD&D policy really is necessary. The age-old insurance maxim that no policy has value, unless what is covered happens to you, applies here. The wife and children whose father was killed in an automobile accident and received $100,000 from an Accidental Death rider undoubtedly believe that it was worth $30 a year for that additional $50,000 of accidental coverage.

INSURER TARGETS LATINO HEALTH CARE MARKET

Pan-American Life Insurance Group is starting a group benefits company that will sell health insurance to Hispanic families that live in the United States.

Pan-American Benefits Solutions will market low-cost medical benefit programs aimed at working families that do not have employer-sponsored medical insurance, according to Pan-American Life, New Orleans.

The health insurance product menu will include dental, vision and prescription plans, according to the announcement.

The new unit will also offer other Pan-American Life products, including group life, group medical, and accidental death and dismemberment coverages.

Pan-American is best known for selling life insurance and health coverage in Latin America.

LINCOLN FINANCIAL GROUP TARGETS SMALL GROUP MARKET

Lincoln Financial Group's Insurance Solutions/Group Protection division announced the national rollout of its Lincoln Small Business group benefits product suite, aimed at the 2 to 9 life market. The products offer small business owners the same benefits larger group clients already enjoy.

"With the Lincoln Financial Group portfolio of benefits--life, AD&D, STD, LTD, and dental insurance--small-business owners can build affordable, attractive benefit packages and gain the leveraging power of a big business," said Chris J. Jakubson, Director--Small Group Business, Insurance Solutions/Group Protection Division. "Lincoln gives them control over the flexible options they want, and the cost-efficiencies they need, which helps them attract and retain top talent. The response has been very positive."

Lincoln has created a dedicated Small Business Center to serve this new client base. The Small Business Center, a home office-based sales support unit, is dedicated to providing brokers with quick quotes and follow-up in support of their customers' needs.

Among other feature Lincoln's Small Benefit portfolio includes Group Term Life Insurance and Accidental Death & Dismemberment:

* Flat amounts up to $50,000 or 1x annual salary up to $50,000

* Dependent coverage amounts of $2,000 spouse/$1,000 child(ren)

* 24-hour AD&D coverage

* Life waiver of premium for total disability

* TravelConnectSM travel benefits provided at no cost

* BeneficiaryConnectSM free assistance to help beneficiaries cope during a difficult and emotional period

* Accelerated death benefit

* Air travel claims up $25,000
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Author:Storey, Denis
Publication:Benefits Selling
Date:Feb 1, 2010
Words:955
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