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Voluntary Benefits:What is controlling employees’ choices?A consumer research study for employee benefits plan sponsors

Sun Life Financial Employee Benefits Group

June 2011

Indicators studied as part of this research:

Indicator ........................................................................................................Page

#1 Rising health insurance costs ..................................................................4-5

#2 Employee values ...........................................................................................6-7

#3 Method of learning .................................................................................... 8-9

#4 Enrollment method ..................................................................................... 10

#5 Reason for electing benefits ...................................................................... 11

#6 Employer funding......................................................................................12-13

#7 Benefits assistance ....................................................................................14-15

Sun Life Financial Employee Benefits Group Research Study

Survey objectives Sun Life Financial’s Employee Benefits Group conducted its third

annual research study focused on voluntary employee benefits.

As in previous years, this study focused on four key objectives:

• To determine which factors have the greatest impact on

whether an individual purchases voluntary benefits through

his or her employer;

• To identify how people want to learn about their benefits—

and from whom they want to learn about them;

• To find out if preferred methods of learning and certain methods

of enrollment lead to higher participation; and

• To probe a variety of other factors that might control how

employees elect, and make changes to, their benefits.

Survey overview While much of the research confirms results from our 2010 report “Voluntary Benefits: Key Factors Influencing

Employees’ Choices,” our latest survey revealed some interesting new findings, including:

1) When learning about benefits, getting assistance increased purchase rates—When asked how they preferred to

learn about benefits, the same number of survey participants used some type of assistance method, such as: one-

on-one consultations, benefit fairs, toll-free services and group meetings, versus a self-taught method, like going

online or reviewing printed materials. However, those who used assistance methods to learn about their benefits

were more likely to purchase or enroll in them.

2) When enrolling in benefits, getting assistance actually decreased purchase rates—When asked how they

preferred to enroll in their benefits, this year only 24% said they preferred to enroll using an assistance method,

like a one-on-one meeting with a benefits advisor. In fact, assistance methods of enrollment, when used on their

own, actually showed lower purchase rates for many benefits. In contrast, the two self-taught methods, online

and paper enrollment, resulted in the highest purchase rates. This new finding, which will continue to be tracked,

seems to suggest that employees preferred to get assistance when learning about benefits, but wanted to enroll

in benefits on their own.

In addition, this year’s survey findings seemed to suggest multicultural differences among respondents. In many

cases, the results revealed that different ethnic groups valued and purchased their benefits differently.

While this overview highlights just a few of the findings from our latest survey, overall results continued to

show that voluntary benefits are important to employees. The findings above suggest that along with offering

these benefits, providing self-enrollment materials and helping employees learn about your offerings, there

is an additional opportunity to consider employee preferences to make learning about and enrolling in these

benefits as easy as possible. At Sun Life Financial, we remain committed to reevaluating trends in employee

benefits and making the results readily available to you. We hope you find these latest insights helpful in

evaluating your own benefits program.

1Sun Life Financial Employee Benefits Group Research Study

Voluntary Benefits Definition

For the purposes of this

study, voluntary benefits

were defined as any benefits

offered through the

workplace for which the

employees either share in the

cost or pay the full cost.

Survey methodology

Primary Shared

33%

67%

Part Time

Full Time

90%

10%

Families & Singles with Children

Families & Singles without Children

60%

40%

Who? This study analyzed the completed surveys

of 3,000 employed adults who met the following

two screening criteria:

• Are the primary decision maker—or share

the employee benefits decision-making

responsibilities—for their household

• Work full time (>30 hours/week) or part time

(<30 hours/week) for an employer with 25 or

more employees

When? This survey was fielded in December 2010, right after

the benefits enrollment period for many organizations—

so benefits and the enrollment process would be top

of mind for survey respondents.

How? The Sun Life Financial survey “Voluntary Benefits: What

is controlling employees’ choices?” was conducted

online using a survey panel. A test version of the

survey was tested and refined before release to ensure

participants’ understanding of the questions as posed.

To make sure accurate comparisons can be made

to Sun Life Financial’s previous survey, results were

weighted by company size.

2 Sun Life Financial Employee Benefits Group Research Study

All Participants Have Either Primary or Shared Responsibility for Family Benefits Decisions

Participants Work for Firms with 25 or more Employees

Households with Dependent Children and without

AffluentFamilies

ComfortableFamilies

Families & Singles with Children 40% Families & Singles without Children 60%

SustainingFamilies

Empty Nesters

Independents

13% 25% 35%19% 8%

Dependent Children

Education

Income

HomeOwnership

Marital Status

Age Range

Yes

Graduate/Post-College Graduate

>$100K

Own

Married

35–54

Yes

Some College/Graduated College

$50K–$99.9K

Own

Married

25–54

Yes

HS Graduate/Graduated College

<$50K

Mixed

Mixed

25–54

No

Graduated College

$25K–$100K

Mixed

Mixed

25–44

Affluent Families

No

Some College/College Graduate

$25K–$150K

Own

Married

45+

Empty NestersComfortable Families

SustainingFamilies Independents

Cluster analysis As part of our analysis, all data were organized by

demographic clusters, as highlighted below. These

clusters grouped participant responses based on a

combination of factors that are often thought to drive

benefits decisions—including age, marital status, home

ownership, income, education and whether or not

there were dependent children.

Wherever differences are significant across these

clusters, we’ll point that out in the following pages.

For example, ethnicity seemed to impact a few findings:

• more than 50% of the Hispanic participants indicated

that they have dependent children at home, and

• when compared to other ethnic groups, Hispanics

and African Americans had the largest share of

sustaining families.

PROFILE OF CLUSTERS ANALYZED FOR THIS STUDY


01020304050607080

Cancel/decrease other insurance

Reduce spending in other areas

% Increase in Health Insurance Costs

5%

80%

70%

60%

50%

40%

30%

20%

10%

0%

15% 25% 35% 50%

% W

ho W

ould

Tak

e Sp

ecifi

c A

ctio

n

Eliminate/decrease contributions to their retirement plan

Cancel medical insurance

#1 RISING HEALTH INSURANCE COSTS

How will rising health insurance costs affect voluntary benefits decisions?With all the uncertainty around healthcare reform

and what the changes will mean for the future cost of

benefits, employees were asked what they would be

most likely to do if their out-of-pocket cost of health

insurance were to increase over a variety of levels,

including 5%, 15%, 25%, 35% and 50%.

Respondents were offered a choice of four options,

as detailed in the chart below. Following are some

key findings based on their responses:

At a 5% rise in health insurance costs, the majority or

70% of respondents still feel they can absorb the cost

difference of medical insurance by reducing spending

in other areas. However, this percentage continues to

decrease, falling from 84% in 2008 to 70% in 2010. Not

surprisingly, more households now feel they will be

forced to cancel or decrease other insurance benefits

to cover the increased cost of their medical benefits.

In fact, the percentage more than doubled from 6%

in 2008 to 15% in 2010.

Similar to last year, even with up to a 35% rise in health insurance costs, the majority still said they’d

reduce spending in other areas to address the increase.

When faced with a 50% increase in health insurance costs, the value of the benefit drops. In fact, 38% of

survey participants said they would actually cancel

their medical insurance. Yet, for the third consecutive

year, fewer than 20% of all survey participants said

they would neither cancel or decrease their other

insurance benefits if the cost of their health insurance

increased by 50%.

WHAT EMPLOYEES MAY DO IF HEALTH INSURANCE COSTS INCREASE


Respondents continue to value their non-medical insurance benefits, refusing to cancel or decrease them even if the cost of medical increases by 50%.

BENEFITS EMPLOYEES ARE MOST LIKELY TO KEEP/CANCEL


Consistent with last year’s report findings, employees

also showed a willingness to eliminate or decrease

contributions to their retirement plan—such as IRAs and

401(k)s—in response to rising health insurance costs.

While only a small percentage of employees said they

would cancel other insurance, those employees were

then asked which types of insurance benefits they

would be most likely to keep—a score of 1—and which

they would be most likely to cancel—a score of 7.

As the chart below shows, those who said they would

consider canceling their insurance would be most

likely to cancel their other benefits in this order:

1) long-term care insurance,

2) short-term disability insurance, and

3) long-term disability insurance.

Of all possible benefit choices, dental, vision and life

insurance were the least likely to be canceled.

0 1 2 3 4 5 76 0 1 2 3 4 5

Vision 3.68

Dental 2.88

LTD 4.10

Life 3.71

STD 4.23

LTC 4.30

Likely to keep Likely to cancel

If health care costs rise, long-term care and disability insurance were cited as most likely to be canceled—possibly due to their costs or lower awareness of the need.

% o

f Em

ploy

ees

Ass

igni

ng a

Poi

nt V

alue

> 0

86%86%

Dental

100%

80%

60%

40%

20%

0%Vision

77%77%

LTD

61%60%

STD

56%56%

Life

64%62%

LTC

46%46%

401(k)

77%76%

4446%%

Cash

32%38%

2009 2010

#2 EMPLOYEE VALUES

Which employee benefits do employees value most?If employees are still likely to value their benefits even

when faced with rising costs in their medical insurance,

the research team wanted to assess which benefits

they value most. To address this issue, we posed a

thought-provoking question to survey participants:

“Assume your household has all the medical

insurance needed but no other benefits. It is up to

you to determine what additional benefits to elect

by distributing 100 points among the following.

Simply select a number from 0 to 100 next to each

benefit to indicate the value to your household.

Total cannot exceed 100 points.”

Dental

Vision/Eye care (separate from medical)

Long-term disability

Short-term disability

Life

Long-term care

401(k)/Retirement

Cash (unused)

Responses to this question yielded three key findings:

1) Employees seem to take a little of whatever benefits are offered. As in previous years of

this survey, nearly half of all respondents placed

some value on six or more benefits. Even more

significantly, 74% chose four or more benefits

when offered. These results were consistent with

previous findings that indicated that the more

benefits offered to employees, the more they’ll take

advantage of them.


27%

47%26%

1 to 3products

4 to 5products

6 or more products

HOW EMPLOYEES VALUE BENEFITS

2) The majority of employees value their benefits more than cash. While cash is still important to

employees, benefits seemed to be more highly

valued this year. Employees’ preference for getting

cash back in their paychecks from unused benefits

points waned a bit from last year. In fact, the cash

category showed the biggest decrease in value

in this latest survey, falling to 32% from a high of

38% in 2009, possibly indicating a more positive

economic outlook. However, as the graph below

shows, sustaining families were more apt to value

cash more than the other groups.

3) Most employees—despite wide demographic differences—seemed to value their benefits the same. Dental and 401(k) were the top two

benefits that were most valued by all groups.

As in the 2010 report, LTD was the only benefit that

continued to gain in value. On the other hand, long-

term care benefits continued to be valued the least

by all groups, except empty nesters.

These findings seem to reflect employees’ likelihood

to elect a majority of the benefits offered to them.

Remember, nearly 50% of respondents spread their

points across six or more products—and another

27% chose between four and five benefits. This could

reflect employees’ confidence that if their employer is

offering this benefit, it must be important. This notion

is supported by the fact that employees continued to

place a high level of trust in their employers, as noted on

page 14 of this report. It may also reflect their aversion

to financial risks of any kind, and their desire to protect

themselves against the unexpected.

The findings also suggested differences in how different

ethnic groups valued benefits. Across the board, Asian,

African American and Hispanic groups had higher

purchase rates than their Caucasian counterparts.

(See page 13 for more.)

HOW DIFFERENT CLUSTERS VALUE BENEFITS

0

5

10

15

20

2525.00

20.00

15.00

10.00

5.00

.00

Mea

n Va

lue

Scor

e

Comfortable FamiliesCSustaining FamiliesS Affluent FamiliesA Empty NestersE IndependentsI

Vision LTD LTC CashSTD 401(k)Dental Life C hDt ll LTCC hhD 401(k)01(k)k)t l LifVi iVi ii LTDLTDD LTCC CCSTDTDSTTD 4001DD LiffVV LT LLL 44DDD LLL


Compared to last year, cash was valued less, and Life/LTD were valued more.

The mean value score is the average of all respondents’ points allocated to each category, based on a 100-point scale.

As in past years of this survey, Sun Life Financial also

explored how employees want to learn about their

benefits and if those preferences impacted their

buying decisions.

First, employees were asked to indicate all the ways

they could have learned about their benefits and

which methods they preferred. They were also asked

how much time they spent reviewing information on

different benefits and what impact that had on their

decision to purchase. Following are four key findings:

1) Available and preferred methods of learning.

Methods of Learning Available Preferred

Self-taught

Printed materials 77% 84%

Online/website 72% 71%

Assisted

Group meetings 41% 60%

Toll-free number 45% 26%

One-on-one consultations 27% 45%

Benefits fairs 22% 47%

Just because more employers offer more ways for

employees to learn doesn’t necessarily mean employees

are taking advantage of all these opportunities. Overall,

printed materials and online/website are still the

two most preferred methods to learn about benefits.

However, fewer employers are making printed materials

available to employees. In this past year alone, the

percentage of employers offering printed materials

dropped five points from 82% to 77%. However,

utilizing the online/website method continues to rise.

In fact, employees who preferred this method jumped

three percentage points over last year from 68% to

71%. Employees’ preference for group meetings also

rose 2% over last year. On the other hand, employees’

preference for one-on-one consultations significantly

declined from the previous year, sliding from 50% to 45%.

2) Assisted learning methods yielded higher purchase rates. As in previous years of this survey,

almost as many employees continued to use some type

of assistance method (46%) versus self-taught methods

(48%) for learning about their benefits. However,

employees who utilized assistance methods to learn

about their benefits were more apt to “purchase”

benefits across the board than those who chose to

learn on their own.

#3 METHOD OF LEARNING

How do employees prefer to learn about their benefits?


01020304050607080

80%70%

90%100%

60%50%40%30%20%10%0%

Self-taught Assistance used None

Dental Vision LifeLTD LTCMedical STDD Cl Dt lt l LifeDD CCM di li l DDDD Vi ii i LTDLTD LTCLTCMM d STST

PURCHASE RATES FOR BENEFITS 100% EE PAID BY METHOD OF LEARNING

Fastest-growing learning method is online/website.

0

20

40

60

80

100100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Did not reviewD <15 minutes< 15-30 minutes1 30-60 minutes3 >1 hour>

STDDentalMedical LTCLifeVision LTD

3) Not much time is spent reviewing benefit information. Regardless of the method of learning

preferred, most employees, in general, do not spend

much time reviewing benefit information. In fact,

medical was the only benefit for which at least 37%

of respondents stated that they spent more than

30 minutes reviewing. The amount of time spent

reviewing materials for LTD, STD and life insurance

virtually remained the same as last year, with the

greatest percentage of employees stating that they

did not review them at all.

4) Learning impacts buying decisions. Again, Sun

Life Financial also explored whether or not the

amount of time employees spent reviewing their

benefits information actually made a difference in

whether or not they enrolled in them.

And once again, those employees who spent more

time reviewing benefits materials were more likely to

“buy” versus those who did not review the information.

In fact, spending a minimum of 15 minutes reviewing

information seemed to increase purchase rates—on

average by 16%.

This year’s results also indicated that getting assistance

while learning about benefits also seemed to increase

purchase rates. But when it came to enrolling for

benefits, getting assistance actually decreased

purchasing. This suggests that employees prefer

assistance when learning about benefits, but want to

enroll in or purchase benefits on their own. Again, this

is a new finding that will continue to be tracked.

PURCHASE RATES BY TIME SPENT REVIEWING


Employees value getting assistance while learning about benefits, but not when purchasing.

Spending just 15 minutes reviewing benefits information increased purchase rates, on average by 16%.


#4 ENROLLMENT METHOD

Which enrollment method is most preferred and used by employees? Employers utilize several different methods to make

it easy for employees to enroll in the benefits they

want. For purposes of this survey, enrollment

methods included:

• Online/website • Paper form

• One-on-one meeting • Toll-free number

• Other

According to our survey results this year, online

enrollment surpassed paper enrollment and continues

to grow. In fact, utilization of online enrollment far

outpaces all other methods as it rose from 43% to 48%

in just one year, while paper form enrollment dropped

from 48% to 43% during the same period. Our survey

results also indicated that online enrollment is now

preferred by 54% of respondents, a significant increase

over 2008 and 2009. Employees’ preference for one-on-

one and paper form enrollment methods, by contrast,

has steadily declined.

There were also a couple of interesting findings to note

about the ways in which employees preferred to enroll.

1) I’ll make my own decisions... When asked how

they would like to handle the question of which

benefits to enroll in, 52% said they preferred to just be

given the descriptions and they’ll make the decision of

whether or not to enroll—by themselves. Although this

number is down slightly from last year, empty nesters

were still significantly more likely to prefer this method

than other segments.

2) And I’ll enroll on my own too. This year fewer

respondents said they preferred to enroll in benefits

through a one-on-one meeting with a benefits advisor

versus respondents of last year’s study. In fact,

one-on-one enrollment methods alone actually

showed lower purchase rates for many of the benefits.

The two methods that resulted in the least interaction

with a third party, online and paper enrollment,

resulted in the highest purchase rates.

When looking at preferences across demographics,

online/website is the most preferred method and is most

prevalent with affluent families. Sustaining families and

empty nesters are the two groups that seem most open

to meeting one-on-one with a benefits advisor.

0

10

20

30

40

50

50%

40%

30%

20%

10%

0%

20092 20102

Paper enrollment

form

One-on-one meeting

Toll-free number

Online/website

Noneof theabove

METHOD USED FOR ENROLLING

Online enrollment surpassed paper forms as the preferred method of enrollment.

11

This year, our survey again probed for what factors

influenced the decision to choose benefits. Consistent

with last year, respondents reported that the

likelihood of using a benefit in the near future as well

as the amount of financial protection the benefit

provided were both key factors in deciding whether or

not they elected a certain benefit.

More importantly, when specifically asked whether

they would select insurance benefits that offered the

greatest amount of coverage but at a higher cost, or

keeping cost to a minimum and getting less coverage,

respondents chose coverage over cost. This finding

reinforces their apparent need for financial protection

as well as their aversion to risk.

However, their understanding of the likelihood of

using certain benefits may be flawed. For example,

survey respondents viewed their likelihood of using

Life, STD and LTD as almost the same. The reality

is they are much more likely to suffer a disability

than to die. In fact, men are twice as likely to suffer a

disability before they die and women are three times

as likely to experience one.*

Similarly, for financial protection provided, responders

rated dental almost as high as STD, LTD and Life, even

though the financial impact of suffering a disability or

dying is far greater than it would be from undergoing a

dental procedure.

*Sources: www.lifehappens.org, www.disabilitycanhappen.org

7.006.005.004.003.002.001.00

2.169 2.343 2.151

0

1

2

3

4

5

6

7

6

5

4

3

2

1

0Dental

LTD STD Life

Life LTC

30.00

25.00

20.00

15.00

10.00

5.00

.00

26.96

FinancialProtection Provided

Likelihood of Using in the Near Future

Advice from Family Members

and/or ThirdParty

Informationfrom YourEmployer

News Headlinesand Advertising

Familiarity with the Insurance

Provider

28.13

8.68

21.15

3.00

12.07

Likelihood of using: (7) significant and (1) is none.

Like

lihoo

d of

Usi

ng/

Fina

ncia

l Im

pact

if N

eede

d

l LTCD tt LifLif LTC

5.90

5.06

VisionVi iVi i

5.294.62

LTDLTDLLTD

2.49

5.18

2.36 2.16

5.335.21

STDSTDSTD

2.34

5.47

Likelihood of UsingL Financial ImpactF

(7) Significant and (1) None

#5 REASON FOR ELECTING BENEFITS

What is the hottest factor in choosing a benefit?

UNDERSTANDING OF BENEFITS

When it came to benefit selection, employees chose coverage over cost.

Hottest factors for electing benefits are “likelihood of using” and “financial impact if needed.”

FACTORS INFLUENCING PURCHASE DECISION

Sun Life Financial Employee Benefits Group Research Study

0

10

20

30

40

50

60 60%

50%

40%

30%

20%

10%

0%Minimal

CostMinimalGreatest

Coverage

55%45%

0

10

20

30

40

40%

30%

20%

10%

0%

2009 Funding

2008Funding

2010Funding

Medical

13%

17%14%

Dental

13%16%

14%

Vision

13%

18%

14%

LTD

25%22%

25%

STD

27%30% 29%

Life

32%33% 33%

LTC

12%

17% 16%

0

20

40

60

80

10040%

30%

20%

10%

0%

Dental Dental Vision LTD STD LTCLife

09 Shared 09 100% EE Paid

90%

69%

78%

55%

66%68%

48% 30%

77%

66%

45%

31%

#6 EMPLOYER FUNDING

Does employer funding influence higher benefits election? Again this year we surveyed employees about their

attitudes around funding their benefits to see if

changes in this area, as well as the general economy,

had impacted their thinking.

To be able to accurately test this idea, our research

team ensured that the study included three different

funding scenarios:

• 100% employer paid,

• 100% employee paid, and

• some level of cost sharing.

Following are some key findings related to

employer funding.

Increase in Benefits Offered at 100% Employer Paid

Compared to the 2010 report, this year’s results

indicate that there’s been an increase across the board

in benefits that were offered at 100% employer paid.

While results show the greatest increases occurred in

LTD and LTC benefits, 100% employer-paid benefits

overall are still at, or below, 2008 levels.

Moreover, results showed that employers are more

likely to share the cost of benefits with employees.

Although some shifting in how benefits are funded has

occurred in the last year, most of this shift appears

to be from an employer-paid model to a shared-cost

model—not to 100% employee funded.

On an even more encouraging note, the survey

indicated that refusal rates have dropped across the

board over last year. This may indicate stabilizing in

the market and possibly a renewed sense of employee

confidence. In fact, refusal rates for most benefits

receded to 2008 levels. Specifically, refusal rates for

medical, vision and life insurance all declined sharply.

Refusal rates, however, for LTC and LTD remained the

highest at 54% and 31%, respectively. But refusal rates

for vision significantly decreased by 4% over last year.

Holding Steady with Employee-Paid Benefits The percentage of households that were asked to pay

100% of benefits remained fairly consistent with 2010’s

report results. On average employees will still elect

benefits—even if they have to pay 100% of the cost.

PERCENTAGE OFFERED AT 100% EMPLOYER PAID


For example:

• Of those employees who were offered dental benefits, 91% said they would elect them when costs

were shared by the employer. And 67% said they elected

them—even if they had to pay for the entire cost.

• Of those employees offered vision benefits, 83% said

they elected them when costs were shared by the

employer. And 63% said they elected them—even if

they had to pay for the entire cost. Marked by an 8%

increase over last year, this indicates that employees

were more comfortable paying for this benefit in

particular—even if they had to fund it completely

on their own.

• Similarly, 71% of those offered life insurance

at their own expense also reported enrolling

in this benefit—a rate which grew by 5% from just

one year ago and is further evidence of employees’

valuing coverages over cost.

Differences by Groups While purchase rates on average remained high even

at 100% employee paid, there were some notable

differences among the clusters for certain benefits. Most

notable were the differences between sustaining families

and affluent families for LTD and STD. The purchase rates

for LTD were 50% versus 72% for sustaining families and

affluent families, respectively. And for STD they were

58% and 76%, respectively. But when it came to life

insurance, purchase rates remained high and consistent

among families with dependent children with only a 2%

difference separating these three clusters, ranging from

81% to 83%.

In addition, the results revealed differences in the how

certain groups valued these benefits. Specifically, Hispanic,

African American and Asian respondents tended to place

higher value on—and have higher purchase rates—than

White Caucasians for 100% employee-paid benefits or

shared. Interestingly, the biggest difference was with LTC.

Purchase rates for the Hispanic respondents were 46%

while the rate for Caucasians was only 37%. Given this

finding, employers with a significant Hispanic employee

population may want to consider offering targeted

benefits materials for this group.

100%

10%

20%

30%

40%

50%

60%

70%

80%

90%

0%Medical

Purchased @ shared cost Purchased 100% by employee

Dental Vision LTD STD Life LTC0

20

40

60

80

100PuP PuP

PURCHASE RATE BY FUNDING METHOD


Employees still value and purchase benefits—even if they pay 100% of the cost.

05

101520253035404545%

40%

35%

30%

25%

20%

15%

10%

5%

0%

20082 20092 20102

EmployerSpouse/Family

FinancialAdvisor/

Broker

Insurer/Carrier

OtherFriend/Colleague

No One/Myself

#7 BENEFITS ASSISTANCE

Whom do employees trust most to explain and help select their benefits?Just as in the 2010 report, we explored whom employees

would trust most to explain their coverage and even help

select their benefits.

The new data suggests that employees trust their

employer most to explain coverages to them. In fact, 38%

of respondents in the survey said they would turn to their

employer for coverage explanations. In addition, their

preference to seek those explanations from their benefit

carrier or insurer has declined from previous years.

There was also a shift this year when it came to whom

employees would trust to actually help them select

benefits. Last year, spouse/family was ranked highest at

25%. But this year, that percentage fell by a couple

of points, while seeking advice from their employer

grew by 3%.

Although fewer than 10% of respondents turned to their

financial advisor/broker for help last year, in this year’s

survey, their trust for this resource seemed to grow a

bit more when it came to both explaining and selecting

benefits. While only 6% sought explanations from their

broker last year, 8% said they would turn to them in this

year’s survey. Likewise, last year only 9% said they would

seek their help when selecting benefits, but this year 11%

said they trusted them most to help them select benefits.

WHOM DO EMPLOYEES TRUST TO EXPLAIN COVERAGES?


Respondents trusted employers most to explain coverage, even more than last year.

05

101520253035404545%

40%

35%

30%

25%

20%

15%

10%

5%

0%

20082 20092 20102


FinancialAdvisor/

Broker

Insurer/Carrier


No One/Myself

30%25%20%15%10%5%0%

Comfortable FamiliesCSustaining FamiliesS Affluent FamiliesA Empty NestersE IndependentsI

05

1015202530354045


FinancialAdvisor/

Broker

Insurer/Carrier


No One/Myself


WHOM DO THEY TRUST TO SELECT COVERAGES?

WHOM DO THEY TRUST TO SELECT COVERAGES (BY CLUSTER)?

When it came to our clusters, their preferences for

whom they would trust to explain and help them select

their benefits were in line with the above findings. There

were no noticeable differences among the clusters

with the exception of empty nesters. When it came to

selecting benefits, empty nesters were much less likely

to turn to their employer for advice compared to other

groups, and much more likely to go it alone to select

their benefits, with 21% choosing this option.

Empty nesters also shared noticeable differences when

it came to whom they trusted to explain their benefits,

by placing more trust in the broker/financial advisor

and the insurance carrier than the other clusters did.

In fact they placed the most trust in the carrier at 35%,

followed by the employer at 30% and broker/financial

advisor at 11%, respectively.

We hope you found the highlights from Sun Life Financial Employee Benefits Group Research Study

interesting. We hope you’ll leverage them to enhance your voluntary benefits offerings and your

employees’ appreciation for and participation in your program.

Recognize that employees value voluntary benefits. Don’t assume employees will cancel supplemental benefits to compensate for rising health

insurance costs. While that may be true for some employees, the survey showed that certain

benefits, regardless of funding, are still important to employees. Continue to offer those benefits

that they value most.

Offer employees assistance with learning about benefits. But let them enroll on their own. The employees in this survey relied on self-taught methods as well as assistance methods

almost equally to learn about benefits. But those who used assistance had a much higher

purchase rate versus those who learned about benefits on their own. When it came to actually

enrolling in/purchasing benefits, those who used assistance methods, however, had lower

purchasing rates than those who enrolled on their own. Consider assistance to help employees

learn about your benefits. But, for enrollment, offer employees a “do it yourself” option.

Use online methods to educate and enroll. Utilizing online/websites to learn about and enroll in benefits has continued to grow. In fact,

online/website usage now exceeds paper forms as the preferred method of enrollment. Partner

with carriers who offer online communications and enrollment.

Encourage employees to review benefit materials. Results showed that the more time employees spent reviewing materials, the more likely they

were to enroll. In fact, just spending 15 minutes seemed to significantly increase the likelihood of

purchasing benefits. And to make this 15 minutes more meaningful, look to partner with carriers

who take a simplified, plain language approach to their benefits materials.

Stress the need for disability protection. Employees’ lack of understanding for disability insurance continued. In fact, as we revealed last

year, they continue to rate the financial protection provided by dental benefits almost as high

as disability benefits even though the financial impact of a dental procedure is far less than the

potential loss of income due to disability. Raise awareness of the serious risk disability poses.

Perhaps refer employees to third-party tools such as those available from Council for Disability

Awareness at www.disabilitycanhappen.org.

Recognize needs of different employee groups. This year’s study revealed multicultural differences in responses among ethnic groups. In fact,

results showed that different ethnic groups had higher purchase rates for benefits than their

Caucasian counterparts. Consider partnering with carriers who offer multicultural support.


Thanks for your interest in our 2011 research study.

Translate this information into action by contacting your benefits broker today.

One Sun Life Executive Park • Wellesley Hills, MA 02481 www.sunlife.com/us

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