Although 28 percent of employed Americans have voluntary group life insurance through their employer, 59 percent of workers who say they do not because their employer does not offer it said they would be likely to purchase it if it was an option, according to a survey conducted by The Harris Poll on behalf of OneAmerica.
It is the second year in a row respondents stated that they see group life insurance as a valuable worksite benefit because it is often unavailable to them to purchase individually. Those who have it said it increasingly gives them the "peace of mind" that they are after (44 percent in 2018; 53 percent in 2019) to survive should a tragedy happen.
"September is Life Insurance Awareness Month, and the information gathered by The Harris Poll provides further proof of the strong desire for employed Americans to have access to solutions to protect the financial future of their families," said Dan Aiello, regional vice president of sales and service for employee benefits at OneAmerica. "For most employees, the workplace is now the only opportunity to be educated about and purchase life insurance form a fully vetted carrier.
"Today, voluntary benefits aren't voluntary at the employer level," Mr. Aiello added. "Employees are demanding these types of products and our brokers understand that their employer groups have to offer them to round out a comprehensive and competitive benefit program."
Almost half of workers who do not have voluntary group life insurance through their employer (47 percent) said it was because their employer did not offer it; among them, a majority (59 percent) said that if their employer offered voluntary group life insurance they would be likely to purchase it.
When asked why they had voluntary group life insurance through their employer, 53 percent said peace of mind; 44 percent said it was to protect family/loved ones from future financial hardship; 39 percent said it was to pay off debts and final expenses in the event of their passing; 23 percent to leave an inheritance for children or grandchildren; and 21 percent to replace a spouse/partner's income in the event of their passing.
"Our brokers, sales team, and employer clients all view employer-provided group life insurance for what it truly is – an affordable way to provide coverage for an unplanned life event," Mr. Aiello said. "If a breadwinner in the family dies unexpectedly, nothing can bring that person back. But what we can and do deliver is comfort, support, and the relief from financial insecurity and devastation."
Although it is open enrollment season for those employers who already purchased policies leading up to January 1, employers can contact a broker about either group life insurance or disability income insurance at any time.
The OneAmerica/Harris Poll provided opportunities for carriers to address:
- 28 percent of employed Americans said that they have voluntary group life insurance through their employer, and significantly more male employees (31 percent) than female employees (24 percent) said they have it.
- 29 percent of younger employees, ages 18 to 34, said that they have voluntary group life insurance through their employer; the next-closest, at 28 percent, were ages 35 to 44 years old.
- Employees with annual household incomes between $75,000 and $99,999 are more likely than those with annual household incomes of less than $50,000 to have voluntary group life insurance through their employer (35 percent versus 17 percent).
Of the American workforce who reported they did not have voluntary group life insurance through work, the leading reason they said that they did not have coverage was not that they had other obligations/expenses that were more important (13 percent), did not see the value of it (13 percent), could not afford it (11 percent), or were healthy and did not need it (11 percent); rather, it was because their employers did not offer the benefit (47 percent).
Meanwhile, the survey showed that 44 percent of employed Americans had traditional group life insurance (that is, term life insurance offered by an employer paid for by the employer).
"Life insurance is one of the most important types of insurance coverage available for the financial wellness of middle America," Mr. Aiello said. "Companies who offer voluntary group life insurance keep their own benefits costs low and give their employees a valuable, lower-cost life insurance option than the employees would be able to purchase in the individual insurance marketplace.
"We need to do more to educate companies and workers on this valuable and cost-effective core foundational benefit," he added.
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].