Bereavement is not the most popular subject to broach, so Helen Swire asks how employers can communicate the value of group risk policies
The group risk market reported a healthy growth in 2016 – however, according to recent research from Metlife Employee Benefits, nearly two thirds (64%) of UK businesses do not have agreed procedures for supporting staff diagnosed with a terminal illness.
The research also reveals that more than one in ten (13%) HR departments have dealt with the death of an employee in the past two years, while around a third have had to offer support to a staff member suffering from a family bereavement.
This is especially worrying in the light of the commonly quoted statistic that for many people in the UK, if catastrophe were to hit, their savings would leave them only a month from the breadline.
“While many people have their mortgages covered, the fact is that on the death of a breadwinner, there is a significant reduction in household income,” warns Paul Avis, marketing director at Canada Life.
“People don’t tend to think through the consequences: utilities, credit card bills, outstanding debts – as well as the increasing cost of funerals, and the changes to state support from April which are likely to leave 88% of families worse off.”
From the employee’s perspective of cost savings, peace of mind, and the ease of access to group life protection as compared to individual protection, the value of death provision is enormous: so why are employers consistently put off?
The group risk market in general seems to be suffering from a misconception about the cost of protection products: research from Legal & General revealed recently that employers overestimate the cost of group income protection schemes by nearly 140%, expecting the average cost to be 3.54% of payroll, when in fact a scheme would typically cost around 1.5%.
The value of protection
“Life cover provides the UK workforce with £980bn of financial protection, on average for less than £10 per month per employee,” Jon Blackburn, clinical and rehabilitation services manager at Aviva points out. “It’s cost effective for employers, and ranks highly as something that staff themselves view as an important benefit.”
There is at least a growing understanding of the business benefits of group life protection: in a workforce where all employees now have access to a defined contribution pension through auto-enrolment, those companies that have invested in group life are afforded the opportunity to differentiate themselves as workplaces that value both employees and their families.
And with the abolition of the default retirement age, an increasing number of older people are in the workforce, and their particular needs have to be met. Employers need to consider what their older staff may need in terms of insurance for themselves and their dependants – and what benefits they will consider attractive.
“We are going to be working older and so are planning for the impact of our age on our working lives: there are more chances that we will be off work due to illness or injury,” says Blackburn.
“And we are aware that we need to cover ourselves for that. Things like critical illness and life cover are becoming more important to us.”
Talking about the worst case scenario
There is a bigger challenge for employers than price: although the older generations are becoming aware that they may need some forms of workplace insurance, there is, as always, the issue of communication.
In a multi-generational workforce, how do you communicate about life cover to ensure that it is truly appreciated? It’s a benefit that the employee themselves will never see the value of and one that many millennials won’t see the relevance of. And it’s a sensitive topic as well: you are, after all, discussing what will happen in the event of the person dying.
“The financial and health conversation is coming together as employers work on making the workplace healthier, and the real strength is in the bigger benefits such as insurance,” says Ron Wheatcroft, technical manager at Swiss Re.
“Life cover isn’t that tangible to communicate, and providers and intermediaries play an integral part in helping the employer and making sure that the proposition is successful.”
Nonetheless, the conversation about well-being remains immensely popular among employees, and financial resilience is a key part of that discussion: for young and old alike.
“We all understand that should we or a high wage-earner in the family be very ill, or worse still, they’re leaving a family behind who not only have to cope with their loss, but also cope with the financial needs,” says Blackburn. “The key is to remind employees that the financial safety net is there for their families.”
Canada Life’s Avis emphasises the importance of understanding employees’ communications preferences. These can range from videos to flyers with information on bereavement and probate – and Avis points out that the opportunity for an organisation to get the maximum value from the benefits spend is via regular and varied communications.
Added value support
Death benefits can also go beyond the insurance and into the personal: how to manage a staff member who experiences a bereavement.
Metlife’s research shows that HR departments are sympathetic towards bereaved employees, with 92% offering flexible hours, 24% providing access to helplines through their benefits provider and 13% offering face-to-face counselling.
Two in five HR departments surveyed also stated that they are considering providing training for line managers to help them support staff – but there is a consensus that more needs to be done.
“Juggling the needs of the business while looking out for the employee can be challenging,” says Damsons Future Planning’s head of future planning, Philip De Ste Croix.
“Most companies will have a compassionate leave policy, however every bereavement is different and so it’s important that a policy is flexible.”
De Ste Croix highlights the importance of balancing the discussion around return to work with offering sympathy while an employee is away – and being patient and accommodating when they return.
A supportive employer reaction can make all the difference to a staff member’s recovery, whether it’s practical or emotional help, but it also has a business imperative.
“If a staff member feels valued they are more likely to open up and share how they’re feeling, and in some cases the prospect of returning will be a welcome distraction which gives an employee routine and focus,” says De Ste Croix. “Losing a good member of staff will cost a business a lot more in the long run.”
Some insurance providers now offer addition ‘bolt-on’ support services such as bereavement and probate helplines, which can help to take away the pressure on the employer who has to deal with the death of an employee, in terms of managing the emotional and practical side of bereavement, as well as the financial.
With so many employers now looking at reviewing and reinforcing their wellbeing programmes, there is a huge appetite to invest in prevention of sickness absence – and in the support of employees and their families at difficult times.
One crucial key to retaining talented employees might be to look after what happens when they’re gone.