Life Insurance Coverage: Employers Being Asked to Close Gap
On Wednesday, MetLife announced the availability of a new resource that would highlight the consequences of inadequate life insurance coverage from the beneficiarys perspective. The resource is aimed toward employers who offer life insurance and asks that they take on some responsibility to help employees build a strong financial safety net.
Three Steps to Closing the Underinsured Gap
According to MetLife, there are three steps to closing the underinsured gap for employees who at some point lack life insurance: evaluate, enhance and educate. The life insurance company suggests that by taking a closer look at these steps, employers could help surviving spouses of former employees maximize the benefits they receive after a loss, something that could have a positive impact on the lives of the beneficiaries.
Why MetLife Wants to Close the Gap
The reason that MetLife is taking extra strides to improve life insurance coverage for beneficiaries of former employees is that it found that more than half of widows and widowers who collected proceeds from their policies received an amount less than one year of their household income.
This small amount of coverage could dramatically undermine a spouses feelings of financial security, the insurer found when it conducted a study on the topic. Because the proceeds made such a significant difference in a beneficiarys financial stability, the insurer is pushing for employers to help fill the gap so that the coverage can essentially become an income replacement.
Tips for Employers
To help employers reach the three-step goal, MetLife provided some tips for employers:
- Conduct an analysis of current participation and coverage levels to determine the extent to which employees are underinsured by conducting an analysis of current participation and coverage levels.
- Provide a comprehensive program that features both term and permanent coverage options.
- Gain an understanding of key demographic differences among the workforce, then address them as part of any educational and communication outreach.
- Remind employees that certain life events may trigger the need to reevaluate coverage levels.
- Provide access to decision-support tools and educational materials (including online income-assessment calculators and tutorials).
By helping employees understand their benefits and making sure that life insurance programs meet all employee needs, MetLife suggests that both the employer and employee can win. Lower life insurance quotes along with a promising compromise in benefits would be great for everyone involved.