Basic employer-paid life insurance is a key foundation to many U.S. workers’ financial safety nets. However, while the typical one or two times salary benefit might be enough coverage for some employees, others will have family and financial situations that require more. Offering supplemental life insurance on a voluntary basis is a cost-effective way for employers to help employees obtain the right amount of insurance for their needs. It is also a way to enhance the group life benefits program as an employee retention tool – an end result which employers may not realize. MetLife’s 9^th Annual Employee Benefits Trends Study found that 59% of U.S. workers say non-medical benefits such as dental, disability and life insurance are important factors in driving loyalty toward their employer, however, only 37% of employers thought so.

Employers want to know that the benefits they offer will be used by employees. With a little bit of effort, employers can implement a supplemental life insurance program that stays top of mind with employees, enjoys and benefits from greater participation rates, and helps reduce the number of underinsured workers—a win-win proposition that also has a great advantage for employers. Employees in the study who report that they are very satisfied with their workplace benefits are about three times as likely to feel more loyal toward their employer compared with those who are very dissatisfied with their benefits program.

Three Steps to Success

Stephen Pontecorvo, vice president of Group Life Products for MetLife, suggests that brokers and consultants can provide the most value for clients by focusing their efforts on evaluation, enhancement and education as three core areas for success:

Evaluation: First, brokers can help their employer clients determine the extent to which employees are underinsured by conducting an analysis of the current life insurance plan’s participation and coverage levels. This analysis can help to understand which employees are most underinsured, and key demographic differences among the workforce. Then, brokers can help clients develop communication approaches to meet these specific needs.
Enhance the Group Life Benefits Package: The best way for employers to meet the needs of a diverse workforce is to offer a comprehensive life insurance program that features both term and permanent coverage options, and adequate coverage amounts to meet varying needs. Additional features, such as face-to-face will preparation and estate resolution services, are another way to help employees meet their evolving needs today and tomorrow.
Education, Personalized Communications and Enrollment Support: Employers can help workers make informed decisions about their unique needs by providing access to decision-support tools and educational materials, such as online calculators and tutorials. Employers also need to remind employees that certain life events may trigger the need to take action and reevaluate coverage levels. Brokers should help clients take into account the demographics of their workforce when developing communications – specifically for example, they should be aware that women participate in group life insurance plans at lower rates than their male counterparts. According to the MetLife study, working women who have life insurance are generally insured for only twice their household income compared to men, who have about three times their household income in coverage.

“Effective communications are key to maximizing the value of the supplemental life insurance program for all stakeholders,” says Pontecorvo. “MetLife’s study found that 55% of all employees do not find their benefits materials to be clear and comprehensive, and only about one in four is satisfied with their benefits communications. This represents a great opportunity for improvement.”

Employees say they would like to see:

more frequent communications (34%);
information tailored to life events (39%); and
benefits information on the internet (44%).

Appetite for Voluntary Benefits

Nearly two-thirds of employees in the study say they value voluntary benefits as a way to obtain benefits that meet their personal needs. In fact, more than half (52%) of employees said they are interested in a wider array of voluntary benefits that they can choose and pay for on their own. That number climbs to 62% for employees with children who are minors – a prime needs demographic for supplemental life insurance. The majority of employees recognize the cost-savings and time-savings of having voluntary benefits available in the workplace.

“Offering access to supplemental life insurance coverage through the workplace is a way that employers can help all employees achieve coverage levels to meet their personal needs in a cost-effective way,” adds Pontecorvo. “Employers who help their employees understand the importance of financial protection and secure the appropriate amount of insurance enhance the perceived value of their group life benefits program and are also likely to gain competitive advantages through increased employee loyalty and goodwill.”

Educational Resources

MetLife offers a wide array of educational tools and resources to help empower employees to make the most out of an employer’s benefits plan -- by helping them understand what type of life insurance and amount are right for them. Among these are a Life Insurance Tutorial with engaging visual and audio components that can help answer the most common questions individuals may have about life insurance, allowing employees to click on the topics that interest them most; a Life Insurance Needs Calculator that can help individuals understand the right type and amount of coverage for their unique needs; a Life Insurance Selector which is an interactive, quiz-like tool that asks employees to answer questions that can help them understand different types of life insurance; and planning guides that help employees document the framework of their financial plan, acting as a repository for personal financial information.

For more information about MetLife’s educational resources for maximizing the value of a group life benefits program, click here

Metropolitan Life Insurance Company, 200 Park Ave, New York, NY 10166

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Maximizing the Value of Supplemental Life Insurance for Clients and Their Employees

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