Financial wellness programs and lending solutions that not only educate employees about financial readiness, but also offer emergency loans or product purchases paid back through payroll deductions, just make sense, according to one benefit industry insider. The real challenge for benefit brokers and advisers selling this voluntary benefit is overcoming employers pre-conceived notion of the products.
While some public sector employers and universities have long been known to offer employee emergency loan programs, the concept is relatively new as a voluntary employee benefit offered by private sector employers. But, its a benefit badly needed, some say, as employees increasingly living paycheck to paycheck continue to take out loans for emergencies or major purchases against their 401(k) plans a detriment to their future retirement security or from less reliable sources.
