Employee benefits help provide a solid financial foundation for many U.S. workers

Employee benefits help provide a solid financial foundation for many U.S. workers. Seven in 10 have at least one employer-provided insurance policy other than health insurance this year.

“Insurance is the bread and butter of many financial advisors, but we must know what protections clients get at work to make sure our offerings are as beneficial as possible,” said Greg Gagne, president of the Million Dollar Round Table. “At the same time, it is also advisors’ responsibility to discuss the conditional nature of employment-based insurance with clients and how and when to add permanent coverage into the mix.”

The roundtable, an independent association of life insurance and financial services professionals, recently conducted a survey to determine what types of insurance are being provided. Nearly 40% of employees have employer-provided life insurance, while one-third have long-term disability insurance. Other popular types include:

• Short-term disability, 34%;
• Accidental death and dismemberment, 25%;
• Critical illness, 18%; and
• Long-term care, 16%.

Although financial advisors typically don’t sell health insurance, health care coverage is still a key component of overall financial health. Ninety-three percent of Americans said they will have health insurance in 2024. This includes 58% American have private coverage, typically from an employer; a spouse or partner’s employer; or federal marketplaces. Another 35% have government-provided insurance, such as Medicare or Medicaid.

Health savings accounts are especially important to financial advisors. Forty-four percent of privately insured Americans said they will have an HSA in 2024. This includes 48% of privately insured men and 39% of privately insured women, as well as 51% of privately insured Americans with children or adult dependents.

In addition, three-fourths of Americans said they have at least one retirement savings account, including 47% who have an employer-provided account and 38% who have a personal account. Men are more likely than women to have both employer-provided and personal accounts.

Related: Report: Most Americans don’t know how much their health care costs

Financial advisors may miss important context if they discuss only personal accounts. Only 17% of respondents said they manage a personal retirement savings account with the help of a financial advisor. This includes 22% of men and 14% of women, as well as 21% of Americans ages 45 and older and 14% of those aged 18 to 44.

“Tens of millions of American workers take advantage of employee benefits from current and past employers every year,” the survey report concluded. “As the exact elections will differ from client to client, financial advisors must take stock of their clients’ employee benefits protections as they chart out plans to help clients reach their financial goals.”