According to the U.S. Department of Labor, employers in 2008 have been spending 30.2% of total compensation dollars on employee benefits, up from 27.4% in 2000.
In view of the cost squeeze employers face, much of this attention focuses on medical and retirement group benefits. This overshadows one other important group benefit–group life insurance.
Ignoring or not emphasizing the value of group life insurance could mean employers and benefits brokers are overlooking a good opportunity to improve employees’ view of the total value of their benefits package.
Reasons that employers often look beyond group life vary, but a central idea for many is that life insurance is not a pivotal benefit and not likely to be viewed by employees as very important.
For some employees, enrolling in group life programs can be a distraction when they must put so much effort into deciding among various health care and retirement saving options, with their matches, vesting, deductibles, co-pays and premium levels.
What’s missing from all of this is the understanding that, while choosing the “wrong” health plan might cost an employee several hundred dollars during a plan year, failing to choose an appropriate level of life coverage could cost an employee’s family hundreds of thousands of dollars and place survivors in a position to lose the wealth and real estate the family has worked so hard to secure.
For group benefits brokers, there’s some good news. On the whole, Americans continue to view life insurance as a key part of their financial security, according to a recent ING survey of over 2,000 adults ages 18+. Furthermore, they want assistance from employers and–in the case of individual life policies–from agents in sizing their life insurance requirements and buying the competitively-priced life products they need.
Conducted in late 2007 and early 2008 by Ipsos Public Affairs, the survey demonstrates the central role life insurance should play in a comprehensive financial plan.
For group benefits brokers, the findings mean that, to help meet the changing or hidden needs of employee groups, brokers can help employers ask the right questions (some are shown in the chart).