Although life insurance is one of the most common employer-provided benefits, many employees do not realize its value. Seeing life insurance as a positive lasting gift to family members versus negatively associating it with death is one way to start. As an employer, you are well-positioned to educate employees on the importance of life insurance to be prepared for a rainy day.
Why Life Insurance Is Important
Many employees have never considered life insurance, or think it is an unnecessary expense. However, having life insurance is important for people of all ages and a few probing questions can help your employees think more clearly about their needs and benefits of coverage, such as:
- Are you the primary household income?
- Do you have a mortgage, college loans or other substantial debt that is unpaid?
- How would your family support themselves if you died?
- Could you (or your family) afford tens of thousands of dollars in medical bills and/or funeral costs?
- Who would have the burden of paying any debt or other financial responsibilities that you leave behind?
Thinking about these issues is not enjoyable for employees, but is important for them to consider their financial responsibilities and take action to protect their loved ones in the event of a catastrophic accident or illness.
Promote Your Coverage
When teaching employees about life insurance, be sure to educate them on the specific coverage you offer as well. Provide ample information about the type(s) of coverage offered, the premiums, the benefits, enrollment requirements, restrictions and any other details they need to know or might not think to ask.
In addition, be sure to sell employees on the advantages of buying coverage through your company. Not only will your employees appreciate the financial education you've provided, but they'll realize the value of the benefits your company offers. Some advantages include:
- Lower rates through your group policy than if buying individual coverage
- No medical exam/review required for group policies (generally); this is in contrast to individual policies, which require medical reviews and may charge much higher premiums or deny coverage based on unfavorable results
- Convenience of purchasing at work instead of having to shop around
- Ease of payroll deductions for premiums
Educating employees on the benefits of life insurance in general and the advantages of purchasing through your group benefits plan can add value to your employees financial planning, increase participation, improve loyalty, and support hiring and retention initiatives.
If you're looking to add life insurance coverage or change your coverage options, the Employee Benefits team at Benefits Resource Group would be happy to assist you.