Whether it’s a rising startup in Silicon Valley or a small nonprofit in Maine, every organization has a common goal: maximizing productivity. Their No. 1 obstacle? Employees’ financial stress, which 86% of employees say affects their productivity.1
Though often overlooked and undervalued, offering life insurance is a simple way to help prevent employees’ financial stress before it can develop in the first place. In fact, nearly 7 in 10 life insurance owners report feeling financially secure, compared with less than half of non-owners.2
The true impact of employees’ financial stress on job performance
More than 2 in 3 Americans are experiencing financial anxiety,3 and over 50% of employees are more stressed about their finances now than they were during the height of the COVID-19 pandemic.1 Furthermore, only 13% of adults say they are “very comfortable” with their emergency savings.4
Financial stress is more than a figurative headache – it has a negative impact on your employees’ well-being. Financially stressed employees are 11 times more likely to have sleepless nights and seven times more likely to suffer from depression.5
This ripple effect extends to the workplace, where it impairs your organization’s productivity. Financially stressed employees spend a quarter of their workweek dealing with financial issues,1 and that lost productivity adds up: A financially stressed employee can cost an employer up to 39 productive days per year.5 That’s well over a month of lost productivity per employee – nearly two months for organizations on a five-day workweek. It’s no wonder financial stress costs U.S. businesses $4.7 billion in lost productivity per week.6
Life insurance helps prevent financial stress in the long term – and the short term
Many people think of life insurance as primarily covering burial costs. It’s true that life insurance can help with final costs, including funerals, which cost $7,640 on average.7 This is why a lot of people buy life insurance in the first place – to eliminate a financial stressor before it can take root. But life insurance can help prevent financial stressors in the even longer term too.
When policyholders follow the experts’ advice and purchase life insurance coverage for about 10 to 15 times their income,8 they enable their beneficiaries to handle common life expenses – credit card debt, medical debt, auto loans – with confidence. In fact, these beneficiaries are often more than equipped to handle life’s larger expenses, such as the $215,000-plus average outstanding mortgage9 and the more than $35,000 average yearly cost of college.10
But beneficiaries aren’t the only people life insurance helps. Many life insurance plans have features that can help prevent financial stress while the policyholder is still alive. These features may include:
Let us tell you a couple of stories: Life insurance in action
Consider Elena and Damian, two hypothetical employees who have different relationships with life insurance.
When Elena begins a new job, she enrolls in life insurance through her employer. With the monthly premium coming out of her paycheck, she forgets about it soon after.
Years later, Elena is diagnosed with cancer. When it progresses to stage 4, she uses her policy’s living benefits to pay for necessary medical care. She also takes advantage of her life insurance policy’s will preparation and funeral planning services.
Fast-forward a couple of months, Elena still isn’t out of the woods. But she’s on the road to recovery – partly because she and her family can fix their attention where it should be: on her health, not her finances.
Damian’s father passed away suddenly following a brief illness. He witnessed firsthand the toll it took on his mother to process her grief while also coordinating her husband’s final arrangements. In the months that follow, she has Damian help her use her life insurance policy’s funeral planning services. Damian doesn’t want to do it – he hates thinking that his mom might not always be there with him and his younger sister, let alone his growing family – but he obliges. She also privately prepares a will with the help of her policy’s will preparation services.
When his mom passes in her sleep a few years later, Damian is thankful a plan is already in place.
Because of his mother’s foresight, Damian and his family are able to truly mourn – not stress about planning and paying for the funeral. And thanks to the will and life insurance payout, some other financial worries are eased as well. Damian’s younger sister is able to pay off her credit cards and student loans, and Damian can pay off his family’s mortgage.
More than the money itself, Damian and his sister view their increased financial security as a final gift from their mother. Damian knows the difference life insurance and end-of-life planning can make both before and after the death of a loved one, and he takes steps to protect his family just as his mother protected hers.
Ready to help employees and their families prevent key financial stressors that can impact their workplace productivity? Contact your Aflac benefits advisor today!
1 Employee Benefit News. “Employees spend 25% of their workday worrying about money.” Published 4.11.2022. Accessed 8.2.2022.
2 LIMRA. “2022 Insurance Barometer Study Reveals the Secret to Financial Security is Owning Life Insurance.” Published 4.25.2022. Accessed 8.2.2022.
3 U.S. News & World Report. “Two-Thirds of Americans Experiencing Financial Anxiety.” Published 4.12.2022. Accessed 8.2.2022.
4 Bankrate. “Survey: Majority of US households uneasy with level of emergency savings.” Published 6.23.2022. Accessed 8.2.2022.
5 Salary Finance Inc. “Salary Finance’s 2nd Annual Report.” Published 2020. Accessed 8.2.2022.
6 PR Newswire. “Report: Employee Financial Stress Costs U.S. Companies Nearly $5B Per Week.” Published 6.16.2021. Accessed 8.2.2022.
7 SmartAsset. “How Much Does the Average Funeral Cost?” Published 4.11.2022. Accessed 8.2.2022.
8 Policygenius. “How much life insurance do I need?” Updated 5.25.2022. Accessed 8.2.2022.
9 NerdWallet. “2021 American Household Credit Card Debt Study.” Published 1.11.2022. Accessed 8.2.2022.
10 Education Data Initiative. “Average Cost of College & Tuition.” Updated 6.12.2022. Accessed 8.2.2022.
11 The Ascent. “What Is Whole Life Insurance?” Updated 3.23.2022. Accessed 8.2.2022.
12 MassMutual. “Life Insurance: 3 income tax advantages.” Published 2.11.2022. Accessed 8.2.2022.
13 Business Wire. “Seven in Ten Americans Believe Life Insurance Will Protect Their Ability to Live a Long, Financially Secure Life, Yet Half Don’t Have Insurance or Are Unsure If They Do.” Published 3.10.2020. Accessed 8.2.2022.
Continental American Insurance Company (CAIC), a proud member of the Aflac family of insurers, is a wholly-owned subsidiary of Aflac Incorporated and underwrites group coverage. CAIC is not licensed to solicit business in New York, Guam, Puerto Rico, or the Virgin Islands. For groups sitused in California, group coverage is underwritten by Continental American Life Insurance Company. For groups sitused in New York, coverage is underwritten by Aflac of New York.
Continental American Insurance Company | Columbia, SC