As Life Insurance Participation Grows, Worker Understanding Lags
by admin on Sep.05, 2010, under Life and Health insurance
The national participation rate in life insurance plans rose from 64 to 69 percent between 2009 and 2010, the Hartford Financial Group says - but lower-income, less-educated workers may be missing out.
That’s because workers with less education and lower salaries were the least likely to say they fully understood the benefits of life insurance. The Hartford found that just 30 percent of people with only a high-school education completely understood life insurance; similarly, only 29 percent of workers earning less than $50,000 were fully apprised of its benefits.
Not surprisingly, younger people - who are less likely to need life insurance - did not understand the coverage as well as older people. Less than two-thirds of those aged 18 to 29 said they knew why life insurance could be a smart investment.
A potential concern is that employers providing life insurance are requiring workers to foot more of the bill for coverage. Last year, 37 percent of people had their insurance fully paid by their employer; this year, 33 percent said that was the case.
Nevertheless, Hartford executive vice president Ron Gendreau said, “Group life insurance [remains] a less expensive option that is easily paid for via payroll deductions.”
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