When candidates are weighing job offers, employer-covered benefits are often a deciding factor. In fact, Glassdoor reported that nearly 60% of workers place benefits as their top consideration when determining a job offer, and 80% would even choose additional benefits over a pay raise.
It’s clear that in today’s modern workforce, basic financial benefits are not enough to stand out from other companies. Businesses need to consider upgraded coverage packages that provide the type of security employees need today. One of these is the sometimes overlooked life insurance coverage.
A good life insurance policy provides workers, especially those with dependents, an added sense of security. Yet many company life insurance plans don’t even begin to cover what workers actually need. While many employers provide group life insurance plans for employees, it’s rarely enough to properly cover them and their families, should something happen to them.
Here are four reasons companies should consider offering a voluntary term insurance plan as part of employee benefits packages:
1. Financial and health benefits are what matter most to workers today
Perks like ping pong tables and gym memberships are nice to have, but financial benefits are actually what matter more to American workers, especially as they face considerable financial challenges. According to this Glassdoor survey, employees place the least value on job benefits that don’t directly impact their lifestyle and finances, such as free coffee and team bonding events. The same is true for your potential hires.
2. Life insurance is a key part of a financial wellness program
The top cause of stress for American workers is their personal finance situation – an overwhelming 62% of Americans say they are stressed over the state of their finances. Yet 1 in 4 working Americans have no life insurance, according to The Guardian Workplace Benefits Study. What your employees might not realize is that a life insurance plan can ease at least one of their financial worries.
Providing a life insurance plan also takes the stress off of navigating the life insurance process, which can be confusing and difficult without employer support. One survey found that 73% of workers did not have voluntary group insurance through their place of work. Some said they thought it was not affordable, didn’t see the value, or they had other obligations. The leading reason, though, was their employer didn’t offer it (42%), yet almost 7 in 10 said they would buy it if it was offered.
3. Most employer plans don’t cover what workers actually need
Your employees may think the group plan is good enough, but typically a company’s life insurance plan provides only a base amount of coverage. Most employers group plan pays the equivalent of a year’s salary. More generous plans can pay two or even three times an employee’s salary. For instance, if an employee earns $45,000 per year, the typical group plan would pay their dependents $45,000. No wonder then that 69% of employees say the insurance they have isn’t enough to adequately protect their family.
Employees can use a basic needs calculator can do the math. Use the DIME method – Debt, Income, Mortgage, and Education – to add up expenses to get a starting number. The amount may include paying off debt like a mortgage, covering childcare expenses, kids’ education, or a family’s entire cost of living, critical if there’s a stay at home spouse. Unless they actually wok through their numbers, many people choose to opt into the basic company policy then “set it and forget it.”
4. Voluntary term life insurance enhances your benefits package
Term life insurance is one type of plan that can be an effective way to give your employees a better financial foundation and support their overall well-being. Term insurance is the simplest of all life insurance policies, making it an easy addition to employer-sponsored benefits.
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When an employee purchases term life insurance, they simply choose the amount of money their beneficiary receives in the event of their death, as well as the amount of time they need coverage for. For example, a 40-year-old father of two teenage children with a stay-at-home spouse may want his partner to be able to pay off the family home, replace his income, and pay for the kids’ college. He might discover he needs a $750,000 policy to supplement what his employer’s group plan will pay.
While adding a term life insurance option can seem like a small step, it can have an impact on recruiting and retaining employees as well as improving their financial wellness.
Life insurance may not be the first benefit a candidate thinks about, it may not even figure into their calculus, but it should. The benefits that matter the most to workers are the options that can make the most meaningful impact on their financial and health wellness. Adding voluntary term life insurance to a company benefits package is an employer decision that demonstrates commitment to employee well-being and an important financial tool many employees need today.