Life insurance is something we all need. Deep down, we know we need it, but it's the last thing we want to think about. In fact, 34 percent of people know they need more life insurance, but many view the decision as overwhelming.
The life insurance landscape can be confusing to navigate. Clients may not know which plans are the best to offer, and even when they have access through the worksite, employees may not know what life coverage they need. In fact, a LIMRA study revealed that 38 percent of respondents did not know what type or amount of life insurance to buy. While this may not be a surprise to some, it nonetheless presents advisers with a great opportunity to walk clients through the various life insurance options to ensure they provide their employees with the best coverage options for their lifestyle. Below are three staple group life insurance products that benefits advisers can review with clients to increase understanding and help them figure out which options provide the most adequate protection for their employees.
Group term life
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As the word "term" suggests, this option provides coverage for a fixed period of time. A simple way advisers can explain this option is that it's typically purchased to help protect dependents if the insured passes away prematurely. When considering a group term life product, advisers can highlight to clients how a flexible plan with multiple term options allows employees to choose what best suits their family and their budget. For example, a family with a newly purchased home and young children would likely want a longer-term plan than an older couple with little to no debt. A waiver of premium, which eliminates the plan's premium if the insured becomes unable to work because of an accident or injury, can also help give employees peace of mind knowing they are covered even if a disability renders them unable to work and pay their bills.
Group whole life
Unlike term life insurance, whole life insurance provides lifelong coverage with consistent premiums and guarantees payment when the insured passes away, no matter how long the policy is in place. One advantage for advisers to highlight is that these plans build cash value, which enables the insured to accumulate savings at a guaranteed rate of return throughout their lifetime in addition to helping manage final and ongoing expenses following the death of a loved one.
Group universal life
Similar to whole life insurance, universal life insurance provides permanent coverage but with flexible premiums and death benefits. With this, employees are able to adjust payments depending on their current financial situation. Advisers can remind clients that funeral costs and similar final expenses are not the only ones to consider when thinking about long-term financial protection. Long-term care can also drain finances quickly, since on average, in the U.S., it lasts for three years and costs more than $200 per day. Many universal life plans now include some type of long-term care benefit option that can help provide financial support for insureds who face this type of situation.
Continue the conversation
Although life insurance can seem complicated, its value outweighs its cost through the ways it helps protect a family during some of the most difficult times they may face. As your clients' trusted adviser, you can take the guesswork out of life insurance by introducing them to affordable, flexible product options that align with their specific benefits strategies. Ultimately, this is another opportunity to help clients protect their most valuable assets: their employees.
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