The past year has forcibly reminded everyone of the importance of being prepared for the unexpected. Financial protection and mortality are top of mind for many as they seek new ways to prepare for a more secure future.
Life insurance is a popular solution, and the proof is in the numbers: U.S. life insurance application activity is growing at a steady pace, with an industrywide 9.2% increase in life insurance applications in the third quarter of 2020.1
The majority of Americans get life insurance through their place of employment, which means employers have an opportunity and a responsibility to provide their employees with access to the coverage they want and need. Yet employers may not know where to turn for coverage that checks all the boxes for their organization and for their employees.
Washington National’s new group term life insurance product, Monthly Income Protection, is a sensible solution for employers and employees alike. Keep reading for five reasons why Monthly Income Protection is an important product for modern families and businesses.
1. Monthly benefits make good sense for employees—and help employers stand out
Monthly Income Protection is new and innovative in the worksite market because it offers monthly benefits. While traditional term life insurance pays out in one lump sum, Monthly Income Protection is designed to pay out in reliable monthly payments, similar to a monthly paycheck.
Monthly payouts simply make good sense when you consider the fact that the number one reason why Americans purchase life insurance is income replacement.2 Monthly benefits can help surviving beneficiaries cover ongoing household expenses for two, three or five years. The continuation of monthly payments to help replace a wage earner’s paycheck can help give a family time and options—so they can adjust and make decisions in their own time.
Monthly Income Protection’s monthly benefits are one of the first of their kind in the worksite market. Employers who are on the cutting edge of offering this product will enhance their benefits package and stand out in a competitive crowd.
2. Monthly Income Protection is a perfect complement to traditional coverage
Many employers already offer group term life insurance. These policies, which pay out in one large lump sum, are great for helping beneficiaries cover funeral costs, medical bills, debts and other final expenses. Yet many beneficiaries are surprised how quickly a lump-sum life insurance payout can be spent. When the money is gone, a family can be left struggling to make ends meet when it comes to everyday expenses.
That’s why Monthly Income Protection is a great complement to this traditional coverage. While traditional group term life insurance can help cover big-picture expenses (like funeral costs and debts), Monthly Income Protection is there for everyday things (like mortgage/rent, utilities and groceries).
3. Additional long-term insurance can provide employees security for life
In addition to the monthly income benefit, Monthly Income Protection also offers the option of an additional lump-sum death benefit of $10,000 to $25,000. This lump-sum benefit can be used to help cover final expenses and other immediate final needs.
While the monthly income benefit expires at the end of its term, usually around retirement, employees will keep their selected amount of lump-sum death benefit life insurance with no more premiums due. The money will be there for their loved ones when they pass away—many years in the future. This unique feature makes Monthly Income Protection a product that provides security during working years and beyond.
4. Portability is a win-win for employees and employers
Most group term life insurance policies terminate when an employee no longer works for a company, leaving them emptyhanded and without coverage after years of paying premiums. Monthly Income Protection is different because it offers portability. Portability means employees can keep their coverage, even after they leave a job.
The advantages of portability for employees are obvious: They avoid coverage gaps and keep the premiums that they locked in when they first signed up for coverage. The advantages for employers may not be as obvious, but they are equally as important: Portability helps employers demonstrate their loyalty to employees. Portability shows employees that their well-being outside of the organization matters. This, in turn, helps build loyalty to the company, while increasing retention and productivity.
5. Monthly Income Protection can be offered at any time
Employers don’t need to wait until open enrollment to offer employees Monthly Income Protection; that’s because, like many supplemental insurance products, it can be offered at any time. This freedom means employers can meet the needs and concerns of employees in real time. Employees who previously discounted life insurance because they didn’t understand the value may now have a different perspective and be interested in purchasing coverage.
A more secure future
A recent study shared that 62% of employers feel “extremely” responsible for their employees’ financial wellness, up significantly from 13% in 2013.3 By offering Monthly Income Protection, employers can help employees improve upon their financial wellness through a more secure future.
1MIPGroup, Growth Slows but Continues in U.S. Life Insurance Activity Reports the MIP Life Index, https://www.mibgroup.com/riskanalytics/life_index_pr.html, 2020.
2Life Happens and LIMRA, 2019 Insurance Barometer Report, 2019, p. 38
3SHRM, Employers Feel More Responsible for Employees’ Financial Wellness, https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/employers-feel-more-responsible-for-employees-financial-wellness.aspx, October 1, 2020. Policy underwritten by Washington National Insurance Company, home office Carmel, IN. Washington National Insurance Company is not licensed and does not solicit business in the state of New York