CALL-TO-ACTION FOR EMPLOYERS TO CLOSE LIFE INSURANCE COVERAGE GAP
New MetLife White Paper Highlights Workplace as Key Source for Driving Change
NEW YORK, March 31, 2010
MetLife, a leading provider of employee benefits, today announced the availability of a new resource that highlights the consequences of inadequate life insurance coverage from the beneficiary’s perspective and illustrates the significant role employers play in helping employees build a strong financial safety net. Three Steps to Closing the Underinsured Gap: Evaluate, Enhance and Educateprimarily utilizes insights from a survey of surviving spouses to outline steps employers can take to help maximize the value of group life benefits programs and make a major impact on the lives of beneficiaries.
According to the MetLife study, more than half of the widows and widowers who collected life insurance proceeds received an amount less than one year of their household income, which can dramatically undermine feelings of financial security. Life insurance proceeds made a significant difference in a beneficiary's financial stability. While more than half of surviving spouses who received three or more years of income in benefits felt financially secure the year following their loss, fewer than one-third of those who received lesser amounts felt financially secure. Only 11% of widows and widowers who received no life insurance benefits felt financially secure the following year.
“Americans are largely underinsured for life insurance, and the workplace can be pivotal in turning that tide around,” said Graham Cox, vice president, Group Life Products, MetLife. “More than half of working Americans look to the workplace for their financial protection products. A perfect opportunity exists for employers to take some steps today that can have long-lasting effects. Targeted communications, educational tools and access to supplemental amounts of coverage through the workplace – even when 100% employee-paid – can encourage employees to obtain the right amount of coverage for their personal needs.”
Encourage Women to Obtain the Right Amount
The white paper also looked at demographic differences and found that women participate in group life insurance programs at lower rates than their male counterparts. And, working women with life insurance coverage generally have only about two years worth of their salary whereas working men have about three years worth. These amounts are considered insufficient in most cases, regardless of gender.
“Life insurance is essential income replacement – not only does it cover day-to-day living expenses for survivors, but it helps secure a future financial plan, including having a comfortable retirement,” said Cindy Hounsell, J.D., president, Women’s Institute for a Secure Retirement. “Making it easier for working Americans to understand their needs and obtain appropriate amounts from supplemental life insurance plans through the workplace will go a long way toward helping more families avoid financial hardship.”
Tips for Employers
Three Steps to Closing the Underinsured Gap: Evaluate, Enhance and Educate offers several tips for employers to help maximize the value of their group benefits programs and help close the underinsured gap, including:
- Determine the extent to which employees are underinsured by conducting an analysis of current participation and coverage levels.
- Provide a comprehensive life insurance program that features both term and permanent coverage options to meet multiple needs.
- Gain an understanding of key demographic differences among the workforce and address them as part of any educational and communication outreach.
- Remind employees that certain life events may trigger the need to take action to reevaluate coverage levels.
- Provide access to decision-support tools and educational materials, such as online income-assessment calculators and tutorials.
Helping employees understand their workplace benefits and ensuring that life insurance programs feature options to meet diverse employee needs can lead to increased loyalty and employee retention. In turn, this helps maximize the value of the benefits program for employers.
MetLife’s Study of the Financial Impact of Premature Death was fielded in June 2009 by Zeldis Research Associates. The study was comprised of 1,000 widows and widowers. All participants had lost a spouse within a period of six months to seven years prior to the survey, and the deceased spouse was between 25- and 60-years-old at the time of death.
MetLife is a subsidiary of MetLife, Inc. (NYSE: MET), a leading provider of insurance, employee benefits and financial services with operations throughout the United States and the Latin America, Europe and Asia Pacific regions. Through its subsidiaries and affiliates, MetLife, Inc. reaches more than 70 million customers around the world and MetLife is the largest life insurer in the United States (based on life insurance in-force). The MetLife companies offer life insurance, annuities, auto and home insurance, retail banking and other financial services to individuals, as well as group insurance and retirement & savings products and services to corporations and other institutions. For more information, visit www.metlife.com.