Why life and disability benefits should not be left in a darkened corner

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Employees are usually clued up on any lifestyle benefits they receive from their company, whether that’s shopping vouchers, discount cards or cash plan benefits, but there’s a gap in knowledge and awareness of financial benefits – arguably the more important part of a benefits package.

The reality is that this results from a lack of communication to employees about the security given to their families through benefits such as life insurance, critical illness cover and extended sick pay cover. Where these benefits are available in the workplace, employers need to provide education around exactly what the cover is and how an employee and/or their family will benefit in the event of an injury, illness or death in service.

Be clear and concise

Being the most important benefits, an employee should have clear and detailed information thoughtfully placed in front them so that where choice is offered through a flexible benefits scheme, they are able to understand and make informed decisions in relation to their own financial needs. This relates particularly to life cover and critical illness. Without understanding the benefit in full, an employee may not be able to decide if investing in critical illness or increasing their life cover is suitable for them.

Making sure employees know the ins and outs can be tough, but those working in HR need to be aware of the importance of promoting life and disability options clearly. The traditional method of hosting a benefits fair to communicate company benefits, although a valuable method, should not be the only communication channel. Not all employees will be available or interested in attending and even if they do go, they may well pass by the financial options and on to the free gym membership.

Be creative about communciation

A more productive way of communicating would be through regular email newsletters that will remind and update employees about their benefits. These emails should have a prominent focus on life and disability cover, clearly displaying what each product is without any insurance jargon. Cutting out the acronyms will make it easier for an employee to understand what life and critical illness insurance is, and how it can benefit them and their families, all in a language they can understand.

Communicating financial benefits could also be integrated into a financial education programme implemented in the workplace, covering topics such as applying for a mortgage, debt management, budgeting, protection and financial planning.

Employee empowerment means there is a general movement away from restrictive benefits packages to flexible and voluntary benefits. However, some packages still carry their limitations. A flexible benefits package means more than allowing an employee to upgrade their life insurance by 1x lump sum. The beauty of flexibility is that options can be tailored and this requires more movement than one step.

Clear communication about life and disability benefits will help ensure employees do not shy away from making the tough decisions necessary in order to protect themselves and their families. Thinking about serious illness or death can be tough. But the reality is it needs to be done and employers can play a vital role in helping their employees to make these serious, but important benefit decisions.

This article was provided by Ellipse.