Nine out of ten businesses offer life assurance as part of their benefits package, yet over half of workers don’t think it is provided to them as an employee benefit, according to research by Aon Consulting, the leading employee risk and benefits management firm.
Aon is urging employers to ensure that workers value this important benefit, and to review their rates to ensure they are getting the best value cover.
The research found that 95%* of companies offer some level of group life assurance to their employees. Of this 95%, 69% of companies offer cover to all employees, with 25% offering it to some employees, and a further 1% awarding it to employees on a paid basis. Meanwhile, just over half of employees (54%**) said they thought life assurance was not provided to them.
This significant gap between employee awareness and reality shows that businesses are missing a trick by failing to communicate the true value of benefits packages at a time when they are more important than ever in the war for talent.
As a result, some employees are potentially duplicating their cover by purchasing life insurance that is already provided by their employer, whilst others have insufficient cover.
Life assurance provided through employer-sponsored arrangements is invariably cheaper than the cover available to individuals and it can be offered with far less evidence of health requirements.
Commenting on the findings, Paul White, head of risk benefits at Aon Consulting, said: “This research highlights the communications gap around life assurance and employee benefits in general.
“In the current climate, a significant number of employers have frozen or even reduced salaries, meaning that the benefits they offer assume even greater importance in the overall remuneration package for employees.
“There is a genuine opportunity for businesses to stress that they give their workforce much more than what is in their pay packet. Life assurance is an essential benefit that provides a degree of financial security in the event of death. Whilst employer-provided cover may not be at the right level to meet all employees’ needs, it does offer some level of protection.
“It continues to be one of the most popular benefits offered by employers and, in the corporate arena at least, remains incredibly cheap to provide. The insurance market for group life cover currently puts market share above profitability, which means employers can continue to provide this benefit at comparable costs to a decade ago. However, there is no guarantee that this situation will continue.
“We would urge employers who have not reviewed their rates recently to do so whilst current favourable conditions prevail, and also to ensure employees value this important benefit.”
Note:
* Aon Consulting Employee Benefits and Trends Report 2009
The 2009 UK Benefits and Trends Survey offers insight into what employers are doing now and what actions they plan to take in the future on DC pensions, health and risk benefits and flexible benefits. The 2009 survey polled 650 employers on various issues relating to employee benefits and pensions.
** Aon Consulting Omnibus Survey 2009
Aon’s Employee Omnibus Survey polled 4046 working adults from a range of industries on a range of topics around employee benefits and pensions.
