Life insurance makes a comeback
Life insurance offered through the workplace is becoming a must-have benefit, especially with small group, as business owners are thinking about benefits beyond traditional core offerings that will make their plans more attractive.
Life insurance was previously a tough sale. More than half of Americans (56%) indicated in a 2016 LIMRA study they had no plan to purchase life insurance that year, while just 25% said it was likely they would do so.
But now, more than half (57%) of employees at companies of all sizes believe life insurance is a must-have benefit, ranking seventh on the list in MetLife’s 2017 Employee Benefits Trends report, behind health insurance, prescription drug coverage, a retirement plan, auto insurance, dental insurance and home insurance, respectively.
OneAmerica, an Indianapolis-based insurer, is seeing an uptick in smaller employers offering life insurance, Steven Lynch, the company’s VP of national sales and services, says. Since the company is privately held, it has not released detailed numbers. But in very small group (under 10 lives), Lynch says it is a “substantial increase.”
The reason for the increase is the changing selling tactics, such as more emphasis on benefit counseling, and increased attention to financial wellness and how life insurance plays into an employee’s financial security. “Some of the recent trends are toward … consultative selling and emphasis on tying the needs of life insurance into the financial picture for employees,” says Judy Buczek, director of group products, life and disability, at Guardian Life, who reports a slight uptick in sales across all employer sizes, as well.
“The emphasis is more on financial education at the workplace. We are seeing that as a trend where employers recognize employees can benefit from financial education,” she adds. “Life insurance plays into a key part of financial wellness.”
An advisers' role
Advisers need to be leading the conversation about life insurance and is naturally a part of financial wellness, explains Quincy Branch, president and CEO of Las Vegas-based brokerage Branch Benefits Consultants.
His firm has “always tried to advocate for [voluntary] benefit offerings and making benefit plans a little more attractive,” he says. Now, he says, business owners are more responsive and open to that conversation.
“Like everything else .. people want to do right by their employees and find ways to offer competitive benefits,” he says.
“At the end of day … we don’t want out interactions to be transactional,” he adds. “Our clients deal with … taking orders all day and insurance is a moving piece of their business operations. We can show them how to use insurance to attract better talent and engage employee morale. That’s what we should be doing.”
Buczek also believes it falls on an adviser to understand client needs of focusing on the entire financial picture of employees and help educate the employee population on the need for life insurance.
“The first step is to work with an employer to understand the benefits offered — what type of income, what type of access and, ultimately, designing a plan that makes sense for that group of employees,” she says.
Branch says life will only continue to grow as more and more advisers make it part of the conservation.
“There is so much confusion with what is going on,” in regards to healthcare reform proposals, he adds. “It is a good thing because it makes employees think about their insurance package and look at all the options. Group life and [voluntary] are finally getting some love.”