Employer-provided life insurance benefits, 2011

In March 2011, 58 percent of private industry workers were offered life insurance benefits by their employers; of these, 97 percent chose to enroll in this benefit. Among full-time workers, 73 percent were offered life insurance and 97 percent participated in the benefit; among part-time workers, by contrast, 14 percent were offered life insurance and 91 percent participated.

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When participation rates of workers in the lowest and the highest quartiles of earnings are compared, the difference is also significant, with 22-percent and 80-percent participation rates, respectively, in the two categories. The workers' earnings also affect the requirement to contribute to the cost of coverage for life insurance: only 4 percent of high-wage earners were required to contribute for life insurance coverage, while 10 percent of the lowest wage earners were in contributory plans.

In 2011, 95 percent of private industry employees with basic life insurance coverage were in plans that used one of two methods of benefit payments: flat dollar amount formulas and fixed multiple of annual earnings formulas. Other methods of payment exist, but they are uncommon; combined, they accounted for about 5 percent of the employees participating in a life insurance plan.

These data are from the March 2011 National Compensation Survey. The access rate is the percentage of workers whose employer offered them life insurance. The participation rate is the percentage of workers who participated in an employer-provided life insurance plan. The take-up rate is the percentage of workers offered life insurance who chose to participate in a plan. The high take-up rates for life insurance benefits reflect that only 5 percent of private industry employees participating in basic life insurance plans were required to pay part of the cost of coverage. To learn more, see "Life Insurance Benefits: Variations Based on Workers' Earnings and Work Schedules" in the March issue of Compensation and Working Conditions Online.