Employee motivation and loyalty go hand in hand with employers’ care for the well-being of their staff. That's why many companies offer so-called ‘benefit packages’ – perks which the employees receive in addition to their salaries. One of these benefits is a life insurance. Starting from this year, the technology company HansaMatrix, in cooperation with SEB, provides their workforce with life insurance.
HansaMatrix made the decision on employee life insurance as the company was looking for more ways to support their employees during the Covid-19 pandemic, says Jānis Sams, Chairman of the Board at HansaMatrix: “As a socially responsible company, we strive to create a safe, supportive and motivating environment for our staff. We made the decision to insure the lives of our employees when we came into the shadow of Covid-19. The pandemic has forced us to think more about ways in which we can support both our employees and their families in these difficult times.”
Life insurance for peace of mind
According to Jānis Sams, life insurance is a great way to let your employees know that you, as an employer, care for them: “Losing someone, especially if they're the main earner, would be a hard blow to any family, and we feel our staff appreciates this bonus and it makes them feel more secure in their daily lives.”
Indeed, insurance is particularly important for those with family or dependents who do not have savings to cover unexpected expenses. A survey* carried out by SEB shows that 71% of working Latvians under the age of 55 believe that their spouse needs to get a life insurance. On the other hand, almost half (48%) of the respondents said that they would need it for themselves, however, only a third have actually insured their lives. Our society’s understanding of the importance of life insurance is growing, while at the same time, it is obvious that most employed people do not have one. For this reason, we should give extra credit to the companies providing this type of protection to their workers,” says Kristīne Lomanovska, Member of the Board of SEB Life and Pension Baltic.
Low cost, big benefit
Confidence in your family's financial security gives peace of mind, and this, in turn, has a huge positive impact on the performance of an employee. However, employee motivation is not the only benefit the company gains. The state supports socially responsible companies by providing tax rebates for expenses related to life insurance of employees – the company is exempt from corporate income tax and social tax if the insurance does not exceed 10% of the gross salary of the employee, but no more than EUR 426,86 per year. Moreover, the company does not have to worry about paying compensation from its own resources if an employee does pass away.
“It's a bonus which we can add to the employee's compensation package at a relatively low cost. It certainly allows us to be a better, more attractive employer, as well as to improve the environment in the company. Insurance helps us plan our budget and avoid potentially difficult financial decisions in the event of employee death,” Jānis Sams adds.
Moreover, health risk assessment is simpler and more flexible when an employer purchases life insurance for its employees. This means that life insurance is possible for those employees whose state of health may prevent them from purchasing this type of protection on their own.
A favourite among benefits
In terms of insurance trends, Kristīne Lomanovska points out that the Covid-19 pandemic has forced the general public to pay more and more attention to various health-related issues. “Employers' willingness to show care for their employees and strengthen their well-being in this time of uncertainty is particularly commendable. Ever since the Covid-19 pandemic started, companies have shown a steady interest in life and accident insurance, as well as building savings for the benefit of their employees. Life insurance remains the most popular asset,” says Kristīne Lomanovska.
At present, a competitive salary is not enough to maintain the image of a desirable employer on the labour market. By introducing employee life insurance, a company can provide a sense of security to the employee's families while strengthening its image as a socially responsible company at the same time, which may prove valuable in both attracting new talent, as well as retaining existing ones.
*SEB pension readiness index 2020 data. 531 working Latvian residents aged 18 to 55 were surveyed.