Group Think: Understanding Employer-Provided Life Insurance
Benefits provided by your company can be an excellent perk, but they also shouldn’t be relied upon entirely.
With the U.S. economy (and the employment market) on the upswing, companies are rethinking the perks they offer to attract and retain talent. In fact, 51% of employers say using benefits to keep employees satisfied will become even more important in the next three to five years.1 Life insurance is becoming a key benefit, with 57% of employees ranking it as a must-have.2 And while most employees will participate in group plans, the policy usually isn’t enough coverage for their needs.
Employer-Provided Life Insurance
Employer-provided life insurance represented 44% of all life insurance policies in 2015 and provided $8.4 trillion of protection.3
55% of private industry companies and 80% of state/local government offer life insurance to their employees.4
98% of workers who are eligible participate
Your participation may vary
Not surprisingly, as people age, they become morelikely to seek additional life insurance coverage.
Percentage of population relying solely on employer-sponsored policy:5
- Millennials: 46%
- Generation X: 41%
- Boomers: 27%
Over one-third of the working adult population believes the coverage received from an employer is sufficient:5
- Ages 25-29: 37%
- Ages 30-34: 36%
- Ages 35-49: 36%
- Ages 50-64: 42%
- Ages 65-70: 38%
But 75 million American families count on life insurance to protect their financial and retirement security.6
Your coverage may vary, as well
The life insurance that comes as part of your benefits package is typically one to two times your annual salary (and likely won’t be transferable to an individual policy if you leave your company).7
Insurance experts recommend having a policy that covers from seven to 10 times your income.8
The median amount of group coverage owned by Americans is $100,000, or the recommended amount for someone earning $10,000 a year.9
Everyone’s life insurance needs will be different, just like everyone’s jobs are. Make sure you’ve got all the information and numbers you need to make the best decision on coverage for you and your family.
1. Retention is Top Benefits Objective, Employers Say, Society for Human Resource Management, 2017
2. Work redefined: A New Age of Benefits, MetLife, 2017
3. Life Insurance Fact Book, American Council of Life Insurers, 2016
4. Employee Benefits in the United States, Bureau of Labor Statistics, 2016
5. 2016 Amica Life Financial Peace of Mind Study, Amica Life, 2016
6. 2017 Life Insurers Across America, American Council of Life Insurers, 2017
7. Why Relying on Life Insurance From Your Employer Can Be a Bad Idea, Monster.
8. Financial Security and Peace of Mind Are More Important Than Ever, American Council of Life Insurers, 2015.
9. 2016 Life Insurance Ownership Study, LIMRA, 2016.
Everyone’s life insurance needs (like everyone’s jobs) are different. If you’re curious about why you may need your own life insurance in addition to what your employer provides, watch the video, “Differences Between Employer Coverage and Coverage You Can Buy on Your Own.”
1 Financial Security and Peace of Mind Are More Important Than Ever, American Council of Life Insurers, 2015.
2 Why Relying on Life Insurance From Your Employer Can Be a Bad Idea, Monster, 2017.
3 Life Insurance Barometer Report, LIMRA, 2019.
ALIC52119 (exp. 10/20)