Research shows that during the course of the pandemic, consumers became more aware of the need for insurance and related protection products. This presents a unique opportunity for the industry to demonstrate the value of the products and services it provides and deliver on the promise of protecting American families.
In 2021, LIMRA joined with seven trade associations to launch the Help Protect Our Families campaign. The campaign is designed to raise industry awareness of the growing life insurance coverage gap in the U.S. Leveraging each organization's unique expertise and resources, it aims to help our collective members better connect with consumers and aid them in getting the life insurance coverage they need to protect their families' financial future security and deliver on the promise. More than 75 companies have united to join the effort and help the industry reach Americans who are at financial risk.
During this upcoming open enrollment season, workplace benefits can play a key role in helping the industry deliver on its promise.
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According to LIMRA research, almost two-thirds of employees are now paying more attention to the benefits their company offers and the coverages provided. Given the challenges the pandemic presents, is it time to think differently about connecting employees with the coverages they need?
One way for employers to think differently is by leveraging behavioral economics and, specifically, the concept of "default bias." Basically, this term means that people are likely to accept what they are given, rather than make a change. Also known as "status quo bias," it has gained momentum among employers who have successfully adopted auto-enrollment of retirement plans.
While this concept has yet to gain traction for the enrollment of non-medical insurance benefits, LIMRA research reveals that almost 7 in 10 employers would consider auto-enrollment for their non-medical insurance benefits. Likewise, employees are open to auto-enrollment, with many indicating they would be likely to retain a benefit that they were auto-enrolled in.
Wellness programs provide another way for employers and employees to think differently about their benefits. Education is an important and needed component of wellness programs. LIMRA research shows that just 1 in 8 consumers have a high level of financial literacy. Financial wellness programs often include educational components that move beyond "block and tackle" financial planning and include broader health and wellness topics. As a result, employees have a better understanding of their life, health, and related nonmedical benefits and how these fit into their overall health and wellbeing. When done well, wellness programs done well can change an employer's workplace benefits program from a once-a-year event to an ongoing part of an employer-employee relationship.
A new sales and service model for workplace benefits continues to emerge, differing from the past by focusing primarily on the employee experience. Auto-enrollment and wellness programs are two examples of how the industry can think differently about the delivery of workplace benefits. Successfully deployed, these strategies can drive better employee engagement and participation in a wide array of workplace benefits, providing employees with the coverages that they are looking for.
While much today is uncertain, it is clear that workplace benefits will remain a critical part of how employers support their workforces and how Americans obtain the protection they need. At this pivotal moment, our industry must deliver on the promise.
Patrick T. Leary is the Corporate Vice President, Workplace Benefits Research, at LIMRA.
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