Risk life insurance and the golden handcuffs program
Corporate life insurance offers employers two types of programs: risk insurance – material compensation in case of deterioration in the health or death of an employee, and cumulative – the formation of additional funds by a certain date (“golden handcuffs” and pension insurance).
Of the pool of companies that included health insurance for staff in their social package more than 5 years ago, up to half of the organizations add risk insurance as a separate option, and about a quarter add accumulative insurance, where pension programs are more popular. The share of “golden handcuffs” accounts for less than a quarter of the volume of corporate endowment life insurance.
If we talk about the amount of investment in such personnel management tools, then, as a rule, an employer spends from 0.5% -1.5% of the wage fund of this employee for one line employee, from 1.5% to 3% for a manager PHOT.
The level of investment in savings programs, especially in golden handcuffs, is certainly higher. Thus, the amount of investment in the corporate accumulative program of a VIP specialist, whether it is a top-level manager or a unique, especially valuable functionalist, can reach up to 35% of his salary. On average, the volume of investments in savings programs is in the range between 10% -20% of payroll.
Among the most striking trends of recent years is an increase in demand for risky programs by “office” employers . One of the demand factors is the high cost of alternative instruments of social support for staff, for example, self-covering domestic injuries or providing assistance to close relatives of an employee. The presence of this option in the company’s social package is a significant advantage when choosing a “dream employer”.
The second trend is the renewed interest of organizations in retention programs – “golden handcuffs”. And if 4-5 years ago, the clients in this area were mainly Western companies, for which the “golden handcuffs” have always been a familiar and effective motivation tool, today the picture has changed: representatives of domestic business are increasingly turning to this tool of personnel management.
According to Beinsure studies, corporate savings programs with a volume of at least 12-20% of the payroll can reduce staff turnover by 30-35% over a five-year horizon.
While maintaining the current economic situation in the country, we predict an increase in the share of accumulative programs in the total volume of the employer’s insurance package up to 50% within five years, and the share of risk insurance up to 75%.
Author: Nataly Kramer
