How Group Employee Benefit Plans can alleviate staff financial concerns
Recent research published by New Zealand’s Financial Services Council (FSC), titled the Financial Resilience Index (opens a new window), has revealed that an increasing number of New Zealanders are experiencing financial worries, with 56% expressing concern about money on a daily or weekly basis. As economic conditions continue to pose challenges, employers have the opportunity to address and alleviate some of these financial concerns.
The FSC survey found that more than half of respondents were unprepared for the potential loss of income of the primary earner in their household. This concerning statistic suggests that financial worries are prevalent across nearly every organisation in New Zealand, while financial protection and preparedness remain low.
In today’s economy, financial pressures can weigh heavily on employees, leading to heightened anxiety and stress, which can ultimately impact their performance at work. Employees who are burdened with financial stress are also less likely to be fully engaged and effective in their roles.
How employers are responding
Organisations can play a significant role in alleviating financial pressures faced by employees. Comprehensive Group Employee Benefit Plans can be designed to directly address financial security and health concerns, making employees more resilient to unexpected events.
What do Group Employee Benefit Plans provide?
Group Income Protection Policies are a key component of these plans, safeguarding income in the event of illness or injury. When employers implement such policies, employees have the reassurance that their income is protected if they are unable to work due to illness, allowing them to focus on their recovery. These policies can facilitate a smoother transition back to work following medical events and injuries.
As a case study, we recently introduced a Group Income Protection Policy for an organisation, offering employees coverage of up to 75% of their salary if they are unable to work due to illness. Our client has expressed satisfaction with the scheme, highlighting its positive impact on employee value proposition and feedback from new employees.
Reducing the likelihood of claims with insurer prevention support
Lockton is observing that insurers are expanding policy benefits to include preventative health and support for employees. With greater access to health and wellbeing initiatives across mental, physical, social and financial health, employers should be making the most of the support available.
For example, in addition to income protection support, policies can include services such as virtual GP consultations, medical second opinions, mental health support, nutrition advice, and exercise services. Such services provide employees and their families with additional support during challenging times and ultimately reduce the likelihood and severity of claims.
Where are claims coming from?
In our experience in the New Zealand market, insurers prefer good, high-quality data. Any insights from organisations such as prevention or early intervention initiatives can provide comfort to insurers when pricing the risk of employee benefit plans.
When marketing an organisation’s Employee Benefit program, having a strong understanding of the organisation’s safety and wellbeing processes, ancillary benefits, and internal support services is essential.
Questions organisations can ask internally
Is the value of the Employee Benefit insurance policy and benefits well understood across my organisation?
Are we communicating the awareness of the support available?
Am I getting the best value for every dollar spent?
Is my employee benefits program achieving what it was set up to achieve?
What else is on offer from insurers to improve my overall employee benefit proposition?
What am I missing out on?
How you can support your staff
Group Employee Benefit Plans empower employees to navigate personal and financial challenges, while also helping organisations attract and retain talent. Lockton can design benefit programs aligned with your business strategies and budget. Contact the Lockton People Solutions team for more information.
The contents of this publication are provided for general information only. Lockton arranges the insurance and is not the insurer. While the content contributors have taken reasonable care in compiling the information presented, we do not warrant that the information is correct. It is not intended to be interpreted as advice on which you should rely and may not necessarily be suitable for you. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication.
