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Life insurance is among the most valued employee benefits, according to 2010 Sun Life Financial study

By Jim Connolly on December 22nd, 2010

While standing in a store checkout line with the looming threat of a powerful hurricane about to make landfall, you may be offered insight into how people view life and how that view affects how they buy. There are the minimalists who buy the essentials: bread and milk. Then there are those who are prepared for the worst, pushing their loaded carts to their parked cars.

Something similar may be going on with over 2800 American workers who were surveyed by Sun Life Financial, Inc. to find out how they buy voluntary workplace benefits. The June 2010 study, "The Voluntary Benefits: Key Factors Influencing Employee's Choices Study," found that there were two drivers in how workers choose benefits: the likelihood of benefits being used in the near future and the amount of financial protection the benefits provided.

Benefits workers value most

Consequently, when employees who participated in the survey were asked to assign a point value to what benefits they valued most, they ranked benefits by importance:

  • Dental: 86 percent
  • Vision: 77 percent
  • 401(k): 76 percent
  • Life insurance: 62 percent

In addition to these benefits, long-term and short-term disability and long-term care insurance trailed with respective showings of 60 percent, 56 percent and 46 percent.

According to the Sun Life survey, employees want benefits that will help them keep their day-to-day lives running smoothly. For example, workers ranked dental and vision among their most important employee-benefits. But workers also want to be protected from catastrophic life events that could leave them poor in retirement or in financial straights if the breadwinners in their families die, which may be why life insurance was among one of the most highly ranked benefits as well.

The benefits that workers may undervalue

The Sun Life study also found that disability insurance and long term care insurance trail the pack of benefits selected by survey participants. The survey cites data that says that there is a one-in-six chance that men will not survive until retirement and a one-in-nine chance for women. There is also a one-in-three chance that Americans will suffer a disability before they retire.

Disability data put out by the U.S. Census Bureau for 2007 indicate that there were 41.2 million disabled citizens and 23.7 million of those were in the 16 to 64 age range. The Bureau's data on the cost of unintentional injuries for 2007 demonstrates that becoming disabled during one's working life is expensive with total costs recorded at $684.4 billion and wage and productivity losses logged in at $344.4 billion.

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