My brain isn't really wired to read survey data and quickly pull out interesting conclusions. But, even this one hit me like a whack to the side of the head.
I was poking around the recent survey results from The Principal Well-Being Index American Worker Survey, and these statistics from employees at companies across the U.S. jumped off the page.
The good: 51 percent of employees identified life insurance as important, and 62 percent are satisfied with their employer provided life insurance.
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The bad: 86 percent of employees do not feel they have an adequate amount of life insurance to avoid any financial recovery time and 61 percent say they would be financially devastated with the death of a breadwinner.
The missing link: 70 percent of employees don't seek the help of financial professionals and more than half of all employees (54 percent) have never calculated the amount of life insurance they need.
There is nothing to celebrate about these statistics. Employees and their families are unprepared for the death of a loved one and it doesn't seem to be high on their priority list to resolve. I guess this shouldn't be a surprise when only 30 percent of them seek the services of a financial professional and, even then, they stretch the truth on things like debt (12 percent) and living within their means (12 percent).
From my own experience, there are some themes that persist when employees enroll for benefits in the workplace.
- They want to enroll for consumable benefits such as medical, dental and vision insurance, but often ignore other critically important benefits, including life insurance and income protection. This is likely because they hope they won't need them or they just don't see the value.
- They get a false sense of protection that basic life insurance (generally provided by their employer at no cost) is enough coverage, but they may fail to adequately evaluate what coverage they truly need.
- They think they can't afford coverage without realizing there are low-cost options available … or they simply underestimate the consequences of not having it.
As a financial professional, you can provide the missing link. Whether through offering group or individual life insurance, I hope you can help elevate conversations with employers and employees alike. It's essential that we get them to think beyond what they want so they make better decisions around what they truly need.
While the life insurance industry is generally regarded as a mature market, it still holds significant market potential. The need for life insurance among American workers is vast and the opportunity for advisors is equally large. I hope you can help find a way to get the message out and, in doing so, help people be better prepared for their financial future.
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