A Comprehensive Employee Wellness Package Includes Individual Life Insurance

Prioritizing financial security for a productive workforce and overall well-being

As any human resources (HR) professional should know, the well-being of your workforce is paramount to the success and productivity of your organization. As such, there’s been a growing shift in the benefits landscape over the last few years toward offering wellness packages. And among the many elements that a comprehensive wellness package should include is financial wellness.
 
Financial wellness amounts to any program that can aid employees in managing their personal finances more responsibly. These benefits can include a range of tools and resources, such as budgeting apps, financial planning seminars, and online mentoring.

However, one thing these programs often leave out is life insurance. In my view, this is a major oversight that leaves many employees without the necessary protection for dealing with life’s uncertainties.

Financial Wellness Equals Financial Security

In today’s environment, many employees face a complex web of financial challenges. From the ever-increasing burden of student loans to soaring healthcare costs and the ever-elusive goal of retirement planning, these challenges can be overwhelming. Debt, in particular, can cast a long shadow over many employees, adversely affecting their ability to save, invest, and secure their financial future.
 
These financial issues are more than just a personal concern. They can also have a significant effect on an employee's performance in the workplace. Studies have consistently shown a strong correlation between financial stress and decreased productivity. And while financial wellness packages can ease some of this strain, they often don’t go far enough.
 
True financial security comes from knowing that both you and your family will be able to weather unexpected financial storms. This is where life insurance can be a crucial addition to a financial wellness package. For this to work, though, it can’t be just any life insurance plan; it needs to be an individual plan. 

Why Individual Life Insurance?

Take a look at the benefits offerings of any given organization, and you’ll almost certainly find life insurance on the list. It’s such a standard offering that most employees will take it as a given. But take a closer look at the specific terms of these policies, and you’ll see that most of them are group plans. Now, there's nothing necessarily wrong with offering group plans to employees. With the right setup, they can provide employees with easy access to life insurance.
 
The problem is that group plans don’t provide nearly enough coverage to make an employee feel financially secure. This wasn’t a problem 40 years back when most people had their own individual policies that the group coverage was supplementing. But today, far fewer people have individual plans. This leaves them with nothing to rely on, but their group policies, which are typically nonportable, have numerous exclusions and provide meager payouts.
 
By contrast, an individual policy is fully portable, has almost no exclusions, and can provide comprehensive coverage since each policy is specifically underwritten to the needs of the policyholder. In addition, employees also have the choice of including spouses and children in the policy. Another benefit of individual coverage is that when you purchase a 30-year term policy, the rate would be locked in for the entire term.
 
In short, an individual policy makes for a far greater long-term investment in an employee’s financial future. There’s also no need for an organization to get rid of their group coverage since both products together can create a truly comprehensive financial wellness package. I guarantee that organizations will see people taking advantage of individual life insurance once they understand what it includes. 

Integration and Access

One thing that’s likely to concern many HR professionals is how to integrate individual life insurance into their open enrollment process. Typically, there’s an established flow to open enrollment, and HR departments are keen to avoid any disruptions to that flow. Forcing employees to complete full life insurance applications in the middle of their open enrollment is bound to cause disruptions when employees are too focused on other benefits, lose track of applications, and have to start the process all over again.
 
To avoid this, companies should offer life insurance during open enrollment as an information-only plan. This means employees only have to fill out a short form before continuing with their open enrollment. Later, they'll receive an email where they can complete the rest of the application. Following this approach ensures there are no disruptions to the open enrollment flow. 

Conclusion

The financial challenges that many employees face today should not be underestimated. A financial wellness package can alleviate some of these financial pressures, but a comprehensive package should include individual life insurance. Providing such a strong level of financial security isn't just a gesture of goodwill. It's an investment in a more satisfied and productive workforce.

Bob Gaydos is the Founder and CEO of Pendella, where he leads a team of innovators in the insurance industry, automating the underwriting process through AI and big data. Over the last 10 years, Bob has founded, invested, advised, and operated innovative companies in the benefit & insurance industry, such as Maxwell Health, Connected Benefits, Limelight Health, and GoCo.