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Payroll Deduction Life Insurance
How to Find Life Insurance In Today's World
Several years ago, I put in a voluntary term life insurance plan for an organization with approximately 400 employees. These were low-wage employees. 47% of the people took life insurance with many also purchasing a plan for their spouse and/or kids. We were amazed at the high level of participation. Later, while discussing the case in our debriefing, we came to several obvious conclusions.
Background
The employees of this employer were all from small towns in Wisconsin and had an average salary of $37,000. The average amount of life insurance purchased was $82,000.
Two questions kept coming up during the enrollment process “Can I take the policy with me when I retire or leave?” and “Can I get insurance for my spouse?”
The answers to these two questions were “yes.” In fact, while cost was a consideration in choosing an insurance company, Portability and Guarantee Issue amounts (for both the employee and their spouse) heavily weighed in on the choice of the insurance company.
So what were the conclusions we came to?
The first one is that people recognize the need for life insurance. The reasons people bought a plan varied. I heard comments like “I want to cover my mortgage” to “I just need enough to bury me.”
The second conclusion was that these employees had not been given the opportunity to buy a life insurance plan. Life insurance agents had not approached them, their home and auto insurance agents had not brought up the subject and they hadn’t received a text or email with an offer.
Employers are now becoming the place where many buy their life insurance. There are many advantages to buying a plan through an employer which we will discuss in the next blog.
Life insurance is no longer readily available in the traditional places it was once purchased. Payroll deduction life insurance gives employees the opportunity to buy a plan through a source they trust. Their employer.
About The Author —
Tim Pachowitz helps businesses build, communicate and implement employee benefit plans. As an Account Executive at Benefits, Inc. engineering a plan strategy from start to finish is the most rewarding part of the role. Outside the office, Tim enjoys the outdoors fishing, hiking and making maple syrup. Most of all, he enjoys time outdoors with his 6 grandsons.
Tim can be reached at tpachowitz@benefitsinc.com