Workplace life insurance and the lifecycle of needs

Voluntary life insurance continues to be one of the centerpieces of voluntary benefits.

Life insurance satisfies an inevitable need for financial protection covering expenses associated with the end-of-life. These needs change throughout the cycle of life, so both term and lifetime products play an important role.

Since the need for life insurance is so inevitable, why is it such a popular purchase through workplace marketing?

• It is convenient for employees, with easy access through the employer and virtually no underwriting. • It is relevant because employees are aware of the need for life insurance. • It’s affordable, with premiums as low as a few cents a month for term and less than a dollar a month for lifetime.

Both term and permanent life insurance can be purchased online or from an agent, but people hardly ever think of buying life insurance without a workplace prompt, or a key life event. Those events define a lifecycle of needs and workplace marketed life insurance meets them perfectly.

There are, however, some educational and timing issues.

Educational issues center around us. When communicating about life insurance, we often confuse the customer during the enrollment process. We make coverage complicated by focusing on technical details. Frankly, I doubt many employees care whether coverage is labeled whole life, universal, term life, or permanent. Life insurance products are often presented as if only one is the “right solution.”

In reality, most people need to consider permanent lifetime insurance to cover the basics, wherever they are in their lifecycle. There will always be final expense bills, the desire to leave a legacy, etc. But in addition, most should consider low cost/high value term insurance during the years of peak need due to family obligations and personal debt. A few basic questions, whether embedded into an online dialogue or in-person conversation, can lead to a logical combination of lifetime and term coverage that makes sense for eligible employees and dependents.

The timing problem is that most marketing takes place during enrollment. It’s a great time to connect with employees and enroll them, but it misses out on opportunities created by lifecycle changes. Happily, benefit administration systems and communication are evolving. In addition, insurers are allowing guaranteed issue coverage in many instances. A well-managed life insurance program includes communication when opportunities arise.

Workplace life insurance is no longer just for death benefits or an available cash value. Nearly all life insurance includes some form of advanced payout for terminal illness and/or critical event needs. Many products also include accelerated payouts for LTC needs, as well as add-on benefits like waiver of premium and accidental death & dismemberment.

Related: The 10 most desired employee benefits in the U.S.

The pandemic has heightened awareness of mortality and the need for life insurance. Yet recent analysis indicates that nearly 50% of Americans are without it, and many more have insufficient protection. Workplace marketed life insurance provides a matchless opportunity to help employees throughout their lifecycle.