Oct 10, 2024
Curious about life insurance?
Employers increasingly are offering the benefit for ‘peace of mind and financial protection’
Employers eager to build a best-in-class workforce are increasingly offering new benefits, as the fall open enrollment season approaches.
“Employers are looking to do anything and everything to round out the benefits package they offer their employees to attract and retain the best talent,” said Greg Puig, partner and head of group benefits at Sentinel Group, an employee benefits consultant based in Wakefield, Mass.
Voluntary life insurance, Puig said, is one of the most popular benefits employers are introducing.
“They feel like they’re doing right by their people by giving them a chance to get some baseline life insurance at a lower rate than if they purchased a policy themselves,” he said.
Voluntary term life insurance, paid for by the employee through their payroll deduction, allow a named beneficiary or beneficiaries to receive a lump sum of money when the insured dies, in addition to their basic life insurance.
Typically, these plans are offered by larger employers, though some smaller clients are starting to offer them as well.
A 2023 study by the financial services company LIMRA found a record-high proportion of consumers who say they intend to purchase life insurance, with particular spikes among Gen Z and millennials.
Massachusetts’ largest not-for-profit health plan, which offers term life insurance plans to its employer customers, has seen an increase in the number of employers interested in offering the benefit in recent years.
“Life insurance is the most popular voluntary product our employer customers offer,” said Sarah Robertson, a voluntary benefit specialist at Blue Cross Blue Shield of Massachusetts.“
We’re very pleased to work with our customers to offer benefits such as term life that can give our members and their families peace of mind and financial protection.
Sarah Robertson, Blue Cross benefits specialist
Why get life insurance through your employer?
Voluntary life insurance offers a level of security and flexibility for employers and employees, Puig said.
Most life insurance plans offered through employers are “guaranteed issue,” which means everyone can get coverage regardless of their health status.
On the flip side, if employees were to call and get an individual life insurance policy, they likely would have to share their medical and prescription history, may have to pay more for their plan, and may risk being declined due to their health status, he noted.
Voluntary life insurance plans have built-in flexibility, too, Robertson said.
Employers can offer the benefit at any time during the year – not just during open enrollment – and the plans often are portable: if an employee leaves their job, they can keep their benefit by paying directly.
In addition, employees can pick and choose if they would like the benefit and can work with specialists like Robertson to learn more about voluntary life and determine how much coverage they need, up to a certain limit.
“Every person’s situation is different. A young employee may not need as much life insurance as someone in their 40s who has two kids and a mortgage. I work with employees 1:1 at benefits fairs and virtually to help them determine the level of coverage that’s right for them and their family,” she said.
Introducing the benefit during open enrollment season, Puig added, also is a catalyst for conversation and education.
Many Americans don’t know a lot about life insurance – especially how and where they can get it. Having it available during open enrollment encourages employees to start thinking and talking about this important benefit.
Greg Puig, employee benefits consultant
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