Nobody can control what tomorrow will bring, but there are ways to prepare for whatever the future may hold.
Your employee benefits help employees pay for healthcare, save for retirement, and protect loved ones from financial hardships. But often, employees fail to take full advantage of the benefits employers offer because they don’t understand the value they provide. Most employees e say they spend more time picking out what to watch on TV than making selections during open enrollment, according to MetLife.
As a result, they can overlook critical benefits, like supplemental group life insurance, a low-cost benefit frequently offered by employers to protect employees against financial difficulties. Recent research indicates 42% of Americans would struggle financially within six months if a wage earner died unexpectedly, and one-quarter would struggle within a month. But the threat extends beyond parents of children under 18 or with special needs. Anyone who has dependents, including aging parents, owns a business or carries significant debt can be at risk too.
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This year, 52% of American adults report they have life insurance coverage, which is down from 2020, and 40% believe they need to either buy life insurance or increase their coverage. But what’s preventing them from doing so? The answers lie in some of the popular misconceptions about life insurance:
It is too expensive: A healthy 30-year-old can expect to pay $165 per year for term life insurance coverage of $250,000, but there is a misperception, by millennials in particular, who expect this coverage would cost $1,000, more than six times the actual price. Supplemental life insurance coverage provided through an employer is priced at a group level, which means that premiums are typically lower than employees could find on their own.
It is only for people who work and have kids: It’s not unusual for younger employees to think they don’t need life insurance. But having coverage can be important for settling outstanding debts, such as if a parent co-signs student loans, or can be a way to give back to a cause or organization important to the employee. Life insurance can be necessary for stay-at-home caregivers, too, to help their survivors cover the costs associated with taking care of children or older parents as well as household duties.
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It is too confusing: Deciding how much insurance a person needs depends on several factors. Experts usually recommend 10 to 15 times an employee’s annual income during working years. To fine-tune the coverage amount, employees can use a needs calculator.
The pandemic has left workers feeling more concerned about protection, and they are looking to their employers for reassurance. According to the 2021 Insurance Barometer Study, 36% of consumers plan to purchase life insurance within 12 months. This represents the highest purchase intent in the survey’s history, so it is critical to connect with employees now and provide them with the tools they need to understand how life insurance can protect their loved ones from financial hardships and help them look to the future — regardless of what it brings — with confidence.
