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Connecting The Dots: Life Insurance And Wellness

Everyone feels stressed from time to time. Many causes of stress in our world today can lead to numerous emotional and physical conditions impacting a person’s overall health and productivity. While stress can come at us from many different places, more and more people are now citing money as the main cause of stress.

PwC’s 2019 Employee Financial Wellness Survey found that nearly one-third of American workers said financial worries have caused them health problems. Even more – 47% – said that worries about finances have distracted them at work while 10% said these problems made them miss work, causing lost productivity from missed days.

Employers are doing more than ever before to help relieve workers’ financial anxiety and protect their overall health and well-being. This requires a thoughtful, comprehensive approach to financial wellness.

The financial stress revealed in the survey shows why life insurance should not be overlooked as a critical tool to provide financial support and security for the people who rely on us.

Not many people want to think about what would happen when they die, but lack of planning for this eventuality can leave families unprepared and insecure. Even when people recognize the importance of life insurance, too few enroll in it. A recent Anthem survey found that although two-thirds of American employees said that life insurance is important to achieve financial well-being, only half said they are covered.

One key to encouraging Americans to protect their own peace of mind and their families’ financial future could be in explicitly connecting life insurance coverage to overall wellness and tailoring its importance to an employee’s specific circumstances.

With nearly half of American households receiving life insurance through their workplace, employers have an important role to play in educating their workers about this benefit as an essential step in planning for financial wellness.

Anthem’s research has found that human resources professionals are a critical source of information for employee benefits, so a first step can be for HR leaders to tailor their communications based on employees’ life stages.

Perceptions Of Life Insurance Across Life Stages 

To do this, employers should tailor their messages to different generations of workers, which our research has shown have different priorities with regard to financial wellness.

Millennials (ages 25-34): Although most millennials say they plan to marry, have a family and buy a home, they often do not prioritize life insurance as part of their long-term financial planning; Anthem’s research found that only 24 percent of millennials report that they are covered by life insurance. Instead, millennials focus on eliminating credit card debt and paying off student loans as important steps to achieving financial wellness.

With low incomes and significant debt, it’s easy to see why millennials might dismiss the cost of life insurance — after all, they are healthy, young and only in the planning stages of starting a family. However, it’s important for millennials, even those without dependents, to consider purchasing a life insurance policy to cover funeral expenses and any outstanding debts they may have. For example, if a parent cosigned their child’s student loan or credit card application, then the parent may still be responsible for paying off that debt.

With this group, lagging enrollment is often attributed to common misconceptions about the cost of life insurance, which LIMRA research says is overestimated by nearly three times the actual amount. In reality, LIMRA says, the cost is often less than a gallon of gas per week. By working with HR leaders to educate millennials on the importance and affordability of life insurance, we can combat this perceived barrier to enrolling in coverage.

To reach millennials, benefits brokers should take the time sit down with this generational group and discuss their long-term plans, hopes and aspirations. Many millennials have yet to develop concrete plans for their future, so it is important to provide a wide range of options to fit any number of future paths. Describe how various types of insurance can support their aspirations while providing a safety net for themselves and their loved ones along the way.

Generation X (ages 35-54): Many Gen X employees are busy juggling family and work responsibilities, with little time to focus on other priorities. According to Anthem’s survey, this group is the most likely to say that finances have a big impact on their well-being, but they are the least likely to say that financial management is a top wellness goal.

Helping this group draw a clear connection between financial stress and overall wellness can encourage them to make proactive choices now that will provide peace of mind for the future. The unexpected death of a loved one could mean the loss of an income for many Gen Xers’ families, yet Anthem found only 58 percent of Gen Xers have life insurance. By increasing this enrollment rate, life insurance can help more families focus on what’s important during a time of grief, instead of worrying about how to pay bills like funeral costs, college tuition for children or outstanding mortgage debt.

Gen Xers are typically working hard and stressed out. Benefits brokers can connect with them by being a sounding board for their financial concerns and responsibilities. Avoid taking up too much of their time, as they view time as money. Prepare everything you want to present and accomplish with them in advance so that you can provide practical solutions for their financial concerns.

Baby boomers (ages 55-73): Life insurance becomes a greater priority as employees become older and approach retirement. Anthem’s research found that more than two-thirds of Americans older than age 55 said they are enrolled in life insurance.

At this point in life, emergency preparedness becomes more central to understanding of financial well-being. For baby boomers, this often means having an emergency savings fund and protecting their income in the face of catastrophic challenges. For this group, focusing on financial peace of mind as a way to enjoy their success and protect their loved ones is paramount to promoting higher enrollment in life insurance.

Baby boomers need someone to discuss life’s hardest questions with. What if I develop a serious illness? What happens to my family after I die? How do I go about organizing my funeral? Many people shy away from these questions. Benefits brokers are in a unique position to be able to explore these concerns with baby boomers and provide concrete answers to these questions.

Beyond Life Insurance

Life insurance plays a critical role in improving an individual’s health, well-being and financial security. Today, most insurers offer much more than simply a sum of money to be paid out upon someone’s death, but that is how most people view life insurance.

Benefits brokers have an important role to play in terms of educating clients about all the benefits that life insurance offers, not just following a catastrophic event but here and now. For example, some group life plans offer member assistance programs that provide telephone, face-to-face, and/or telehealth counseling as well as legal and financial consultations and will-generation tools. Other services include identity theft recovery and travel assistance.

Take the time to get to know clients’ lifestyles, needs and priorities. Then review the services offered by different companies to find the right fit for your clients. Your clients may be surprised to learn that the life insurance they buy today can be part of a package that helps them cover educational expenses for their children or plan and insure the vacation of a lifetime.

When discussing the purchase of group coverage with employers, find out where their priorities lie. Is this a highly competitive industry where investing in workers’ financial peace of mind can help alleviate toxic stress? Is this a group of employees who hold education for their children as a high priority? What about wellness? What are the typical ages of the employees? Are most of them single or married? Having answers to these questions can help you direct employers to the insurance plan that benefits everyone.

Although it can be difficult to think about a potential loss, preparing for the unexpected is the key to preventing anxiety now and down the road. Life insurance is a significant step toward financial wellness and overall health. We all have a role to play in connecting with employees about its potential benefits, regardless of where they are in life.

Greg Poulakos is president of Anthem’s life and disability business. Greg may be contacted direcly at [email protected] [email protected].

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