3 powerful reasons why you should offer protection as part of your employee’s financial plan

Without the help of a crystal ball, we can never know what the future has in store.

If we were to look back over the course of our lifetime so far, we can likely pinpoint events that occurred without warning. These can be positive events, like meeting a future spouse or getting a dream job – but they can also be negative, such as the passing of a loved one.

One example we can all relate to in today’s world is the Covid-19 pandemic. There was no warning that our lives might be turned upside down unexpectedly in 2020; we simply had to adapt as best we could when the situation presented itself.

Although we can’t predict the future, we can say with some certainty that life will continue to throw curveballs our way. We can’t always be emotionally prepared for these events, but luckily, you can help your employees to prepare their finances to shoulder an unexpected blow if one occurs.

So, here are three powerful reasons where offering protection benefits to your people can help them meet their financial plans:

They can overcome difficult periods without using up their hard-earned savings
It isn’t easy to think about, but employees should consider how their family would cope financially if they were to pass away suddenly or become too ill to work.

Many of us like to think “it’ll never happen to me”, but unfortunately, nobody is invincible. According to Money Marketing, UK insurer Aviva paid out more than £16 million in testicular and prostate cancer critical illness claims in 2020 alone. And surprisingly, 87% of those making successful claims were under 50, and 9% were under 40 years old.

If one of your employees were to become seriously ill, or even pass away, their family might experience a period without income – meaning their savings may become quickly depleted if they don’t have protection in place.

Although your employees can’t always control an unexpected event, such as becoming seriously ill, you can help them control how they protect their wealth before it happens. Protection options like life insurance and critical illness cover can help shore up their wealth against the unexpected.

With a life insurance or critical illness cover payout, their family could:

• Continue to pay the mortgage, meaning they could remain in their family home
• Focus on their health and wellbeing in a time of stress, rather than financial worries
• Maintain a substantial savings pot instead of depleting their hard-earned wealth.

If your employees are searching for a way to protect their savings from unexpected events, it’s important to make them aware about their protection options.

With protection in place, they can grasp opportunities with greater confidence
One of the most common myths of financial protection is that it may sound good on the surface, but the providers always find an excuse to avoid paying out. Thankfully, when you check the data, you’ll find this couldn’t be further from the truth.

According to the Association of British Insurers (ABI), a record number of claims were paid in 2021, with 98% of claims accepted across individual and group insurance policies.

Additionally, the ABI states that of the 2% of claims not accepted, most were “non-disclosure” cases – meaning the policy holder did not reveal conditions that might have affected their claim.

When your employees understand that statistically, their claim is highly likely to be successful, they might feel more confident to invest in the protection benefits you’re offering for them and their loved ones.

It can help them to keep their future plans on track
One of the biggest benefits of your employees finding the right financial protection for their needs is that whatever the future may hold, it can help to keep their plans on track.

If they were to fall ill with a serious illness and had to take an extended period of time off work to recover, it could seriously affect their finances. Not only might they need to dip into their savings, they may also need to halt their pension contributions.

This can be a serious problem and could lead to them not having enough money in retirement. Since missed contributions would have had many years to grow, they can have a large impact down the line.

This is where Critical Illness Cover can help your employees, as it would allow them and you to keep paying into their pension fund if they needed to take time off work to recover. This can ensure that they wouldn’t need to take a break in their monthly contributions, and so have enough in their pension pot when they retire.

When your employees have the right type of protection in place it can give them the confidence to know that illness won’t affect their progress towards their life goals.

Offering financial protection and highlighting its importance to your employees not only benefits them but can also have a positive impact on you as their employer. Financial protection can be used as a tool to: increase morale, boost productivity, improve employee engagement and lower absenteeism. Financial stress can impact many aspects of life, including work, therefore by helping your employees to maintain financial stability and plan for the future, you’ll have a happier, more productive workforce.

Financial protection is an important part of creating long-term security. We have created a guide which highlights the importance of understanding the different types of financial protection available. Download ‘Your complete guide to financial protection’ here.

Get in touch

Secondsight are multi-award winning employee benefits, workplace wellbeing and financial education specialists. If you would like to find out more about how we can support you and your employees with any of the above, please contact us today.

Please note

Note that life insurance plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.