Group Term Life insurance – a very important benefit to employees and their families

Group Term Life insurance is often a tertiary discussion topic during a typical benefits strategy session.  Most employee benefit decision makers focus on health insurance due to issues arising from healthcare reform along with the ongoing challenge of managing increasing premium costs.  Dental is a close second as many employees focus on the immediate high costs of dental care for themselves and their families.  The life insurance program generally falls farther down the discussion list and can sometimes become an afterthought.  It’s important to not let that happen as research shows this program is a very important benefit to employees and ultimately, their families.

Every six years, LIMRA  conducts a life insurance ownership study to provide detail on the status of the life insurance marketplace.  Their last study completed in 2010 found that:

• Only 44 percent of U.S. households had individual life insurance.
• Thirty-five million households had no life insurance coverage, which was an increase of 8 percent from 2004.
• Eleven million households with children under age 18 had no coverage.
• Four in 10 households with children under 18 said they would have immediate trouble meeting everyday living expenses if the primary breadwinner died today.
• Almost 8 in 10 U.S. households currently do not have a personal life insurance agent or broker to turn to and most of them say they never did.

These facts showcase an alarming challenge for many of your employees and their families.  Life insurance is not a priority yet the financial implications of not having the coverage are potentially overwhelming.

Having a well designed group term life insurance program provides employees with a much needed financial umbrella that many cannot or will not consider purchasing on their own.  It’s typically low cost to most employers with the potential for multi-year rate guarantees and can be structured to fit the many varied needs of any workforce.  Flat dollar benefit amounts are common along with a percentage of salary approach.  Combining the employer paid benefit with an additional voluntary life program on either a term or universal life platform will show a workforce how much you care about their individual needs.

If you haven’t spent much time on this program during your previous employee benefit review sessions, I recommend that you do so going forward.  You’ll gain a lot of employee appreciation for very little cost.