Group Life Insurance Audit
Eliminate Unnecessary Risk
If you require Evidence of Insurability (EOI) for higher levels of employee life insurance coverage, you may be at risk.
A noninvasive Group Life Audit eliminates the risk employers assume when their employees are paying for life insurance policies out of sync with the life insurance carrier.
A Group Life Insurance Audit mitigates millions of dollars of risk quickly, quietly and professionally.
How It Works
Over 80 Million Americans receive guaranteed life insurance through an employer, and most employees get the opportunity to increase coverage for themselves or dependents through an increased payroll deduction. Commonly, employees may choose a life insurance coverage increase of one to five times their salary, and most employers require employees to complete evidence of insurability (EOI) to receive the highest levels of coverage. (The Evidence of Insurability might include paperwork, bloodwork or a physical.)
The First Mistake
Employers often fail to inform employees clearly that if they choose coverage levels of “x” or “y” they will be required to complete an Evidence of Insurability, and that it may include a doctor’s visit or paperwork. Recent data from Group Life Audits show that over 55% of supplemental life elections never completed their EOI.
A Complicating Factor
Every year more and more companies are using web-based enrollment systems, and these systems are integrated with payroll systems to begin deductions on the first paycheck of the new plan year.
The Second Mistake
Benefit paycheck deductions begin without regard to completion of a potentially required Evidence of Insurability. This oversight results in employees paying premiums out of their paycheck for increased levels of life insurance coverage.
In the absence of Evidence of Insurability the Life Insurance carrier will eventually reduce coverage to guaranteed issue levels, typically tens or hundreds of thousands of dollars below what the employee signed up for at Open Enrollment. There are over 900 life insurance carriers and 290 million active life insurance policies in America, yet there is no uniform policy for EOI reporting. For many carriers, their EOI reporting to employers is often lacking or even nonexistent.
The Final Mistake
Upon receipt of notification of missing EOI, employers rarely update the payroll premium to the new, lower level of coverage.
Failure to update the payroll system to the new lower life insurance premium due to a missing EOI creates a de facto contract between employer and employee for a level of coverage that is significantly higher than what the life insurance carrier is obligated to pay.
The Solution: A Group Life Audit
A proactive Group Life Audit from DSI eliminates the risk employers assume when their employees are paying for life insurance policies out of sync with the life insurance carrier.
DSI proudly serves organizations of all sizes from a variety of industries