Brokerage Ops the December 2012 issue

Life After Death

Brokers can help clients navigate a tragedy.
By Bob Gatty Posted on December 11, 2012

Brokers can help their clients get through such an event, regardless of whether the death occurs as a result of a prolonged illness or happens unexpectedly.

The broker’s role begins long before the death occurs, says Mike Colarusso, managing consultant at Charon Planning in Warrington, Pa., which specializes in employee benefit consulting services. That role begins with the planning and development of a strategic plan for benefits, one that looks ahead at the support services that will be required and provides for them, he says.

“The key is to make sure we understand the objective of the client and that we minimize the risk to the organization to the extent that we can through some insurance program,” he says. “So it is essential to think about this long before it happens and that we understand the expectations of the client and its employees.”

Insurers offer resources that brokers can use to help their clients. For example, Liberty Mutual Group Benefits publishes a guide called “Moving Forward, Addressing the Death of an Employee.” The guide offers a step-by-step checklist of actions that employers should take when a staff member dies, whether it occurs on the job or elsewhere.

“Managing the impact of an employee’s death can be challenging, especially since employers rarely deal with such an event,” notes Heather Luiz, Liberty Mutual manager for disability, life and leave products. “There are a lot of things to think about in terms of support—who the employee is, the kind of coverage that was in place, what happened.”

The circumstances of the death will influence what kind of help the broker and employer can provide. One consideration is whether the death occurred at work. But Luiz mentions others: “Is there a beneficiary on file? How are you handling the folks who are left behind? Do you have a transition process in place for continuity, for finding a replacement and moving forward?”

Luiz emphasizes the importance of developing a strategy to ensure the employer offers appropriate benefits in the event of an employee death and that the employer company is protected. “We want to make certain as we look at the group that coverage is appropriate, high earners vs. other employees, executives vs. non-executives. Are your people covered in the way you want them to be covered?”The broker plays a critical role in developing this strategy.

“Group life is a very efficient and effective way to provide many of these benefits, and there is other coverage available as well, but there needs to be a strategy behind the coverage that is offered in order to maximize your investment,” Luiz says.

The insurer, Luiz notes, can provide significant support to help companies cope with such circumstances.

When a death resulting from a long-term illness occurs, the insurer can work with the client to ensure the claim is properly filed, that the beneficiary gets paid, that the employer understands what other services are available, such as financial planning, Social Security assistance, or an employee assistance program (EAP) with counseling or even child care assistance.

If there is a workplace accident that results in a death, counselors may be needed on site. “If so, how soon and for how many days will they be needed? We want to take care of the workforce that witnessed this or who worked with and knew the individual,” Luiz says.

Once notified of an accidental death, Colarusso’s company works directly with the client’s human resources department.

“Many employers don’t understand what’s available to them regarding events that are not that frequent,” he says. “They forget what they purchased and what is included in their policies. So we want to be sure they are aware and can take advantage of what they have paid for.”

His company will go further, even to the point of arranging for counselors under the EAP. “We coordinate all of the scheduling for any type of crisis management assistance that needs to take place,” he says.

Colarusso agrees that strategic planning is critical. “The last thing you want to happen is to find out that coverage that you thought was in place is not there,” he says. “If promises of coverage were made, then someone has to pay, so it is important to understand the risk and make sure it is secured and minimized to the extent that you can.”

To develop a strategic plan, brokers must have a clear understanding of the customer’s needs and objectives and ensure the benefits package effectively meets those requirements.
“If you do it upfront, you will avoid problems downstream,” Colarusso says.

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