Voluntary benefits, products that employees pay all of the cost for, have become more popular as employees seek greater security of their overall financial situation.
“With Gen Xers and Baby Boomers facing a triple threat to their financial security – planning for retirement, saving for a child’s education and caring for an elderly parent – more employees are appreciating the convenience and value of purchasing insurance and investment products in the workplace,” says Rob Henrikson, president of MetLife’s US Insurance and Financial Services Businesses.
Less traditional protection products and investment offerings, typically purchased outside of the workplace, are making significant strides as voluntary benefits. A significant number of companies surveyed now offer, or are planning to add, the following products in the next 18 months:
- 40% optional term life insurance
- 37% long-term care insurance
- 21% critical illness insurance
- 21% stocks/bonds
- 19% travel accident insurance
- 16% financial planning
- 15% auto insurance
- 14% mutual funds
- 14% group legal services
- 14% 529 savings plans
- 11% homeowners insurance
- 11% annuities
Employees view voluntary benefits as a convenient, disciplined way to save. Employees cite “the convenience of payroll deduction” (86%) and “disciplined savings” (82%) as the two biggest reasons they choose voluntary benefits at work. Other advantages given include, “no medical exams” (71%), “better rates/group rates” (75%) and “time savings” (71%).
The increase in financial products being offered has more employees seeking financial advice. The study found 61% of employees are interested in having access to a financial planner at work.
Additionally, employees are seeking advice because of concerns about their financial future. Top employee financial concerns were found to be: outliving retirement assets (79%), financial security in the event of a disability (75%) and providing for their own or their spouse’s long-term care (LTC) needs (73%).
Yet 31% do not have disability coverage and 48% feel their coverage is inadequate.
The MetLife Employee Benefits Trend Study was conducted during the third quarter of 2002. The survey polled 605 HR/Benefits executives and 1,038 active full-time employees from companies with at least 50 employees.