The three E’s of employer-provided life insurance: Education, encouragement, enrollment
The days of employees spending their entire careers at one company are long gone, as the average employee will change jobs 12 times throughout their career. This environment of high turnover makes it imperative for employers to provide top-notch benefits to recruit and retain top employees.
Personal and family financial security are big reasons why employees select jobs. One of the first steps they can take toward that financial security is choosing the right mix of employee benefits. Of these benefits, one that is necessary but often overlooked for financial security is group life insurance, which can help to protect an employee’s family in the event that they pass away and their income is lost. Whether you already provide life insurance and are reevaluating your group life plan or you don’t already offer the benefit, there’s a lot of important information to consider when educating, encouraging and enrolling employees.
There are two major categories of employer-provided group life insurance: Basic employer-paid life and supplemental life. Many employers provide a basic life plan and may even pay part or all of the premium. Supplemental life insurance, on the other hand, is typically paid for by employees via payroll deductions.
Which plan is right for each employees’ unique needs depends on a range of factors including family size and upcoming life events, like purchasing homes, having children or paying for education. For employees who need more life insurance coverage than basic employer-paid life, it’s possible to give them the opportunity to purchase supplemental insurance so they can tailor the amount of their life insurance to their families’ needs. Combining basic employer-paid life and supplemental life can ensure that your employees’ families’ have the range of benefit options they need to be financially protected.
Because life and family milestones change, employees and their families’ needs will change with time. As these life events occur, encourage your employees to review their life insurance coverage.
Employees are not enthusiastic about discussing their own mortality, so it can be challenging for employers to talk to their staff about life insurance. Educating employees about the life insurance options available to them is crucial to increasing participation in your company’s life insurance plans. Ask your group life insurance carrier about how they can help educate and support enrollment for employees. Many have teams dedicated to doing just that.
The most important thing is educating your employees on how life insurance fits into their overall personal wellness plan. Providing financial wellbeing and peace of mind for their families often drives employees’ to work in the first place, and life insurance is a safeguard for their loved ones. It can be used to cover funeral expenses, student loans, credit card debt, mortgages, or just about anything their families need it for.
Many employees pass up life insurance because they think it’s an expensive luxury that they don’t need, but it’s more affordable than many think. According to the 2018 Insurance Barometer Study, 61% of the people surveyed stated that they don’t buy life insurance or don’t buy more of it because they have other financial priorities. Some 44% of millennials surveyed overestimated the actual cost of life insurance by five times the amount. Many employees don’t know that they can often purchase group life through their employer at a lower cost than if they were purchasing life insurance on their own outside of work.
In addition to life insurance being surprisingly affordable, applying for and enrolling in life insurance is easier than it has ever been. In many cases, employees can be automatically approved for some life insurance under a guaranteed issue provision while they’re waiting for approval for higher life insurance amounts they elected. Employers can also partner with brokers, benefit administration firms, and insurers for automated enrollment and employee benefit administration.