Offering Identity Theft Protection as an Employee Benefit
March 28, 2023
You have been hearing for quite some time now that employers are looking for new and unique benefits that they can use to get a leg up on the competition in hiring and retention. Likewise, today's employees want more than health insurance and retirement plans. They want benefits that speak to modern needs. Enter identity theft protection.
Identity theft is a very real problem worldwide. It affects millions of people and costs billions of dollars. Anyone not enrolled in some sort of identity theft protection program at this point is playing with fire. Here's what you need to know as a broker: you can encourage your clients to offer ID theft protection as a benefit, thereby demonstrating to employees a genuine concern for their financial security and wellbeing.
Offering ID theft protection as an employee benefit wasn't on the radar 10 years ago. It wasn't even all that common five years ago. But identity theft itself has exploded and only continues to get worse.
Possible reasons for the increasing trend in ID theft include more and more companies storing consumer information in digital portals without investing the necessary money or resources to protect that sensitive, valuable data along with the coronavirus pandemic. According to McAfee’s A Guide to Identity Theft Statistics for 2023, the most common type of identity theft was government documents and benefits fraud, which soared during the pandemic.
Check out these statistics from the National Council on Identity Theft Protection:
Those who make a living by stealing identities are doing very well for themselves. Some use the stolen identities to purchase all sorts of goods that they then turn around and resell. Others sell stolen identities outright. Chances are that many of the employees working for your clients have had personal experience with ID theft.
Like all employee benefits, ID theft protection plans run the gamut from basic to comprehensive. A basic plan consists of credit report monitoring complete with alerts letting subscribers know that someone has either opened or attempted to open a new line of credit using their information.
More comprehensive plans often include:
In relation to the last benefit, ID theft insurance makes a cash payout to cover any financial losses experienced by a covered victim. Covered expenses usually include those incurred to restore the person's credit.
It should be clear that every American adult can benefit from identity theft protection. It goes without saying that such protection is virtually a must-have in the digital and connected world in which we now live. So how do you pitch the benefit to your clients? Start by offering it as a low-cost voluntary benefit.
The nature of voluntary benefits is such that employers can either contribute to the cost of providing them, shift the entire cost to employees, or pay for the entire benefit themselves. Regardless of the choice, identity theft protection is a pretty inexpensive benefit compared to health insurance premiums and retirement plan contributions. Your clients get an awful lot for very little. In return, they pass it along to their employees.
Next, pitch identity theft protection as a high-impact benefit. It is high impact in the sense that it can protect employees against a crime that could otherwise turn their lives completely upside down. From the standpoint of offering voluntary benefits that make a company more competitive, very few products can do it as well as identity theft protection.