Life insurance is one of the most sought-after employee perks, often provided for free or at a reasonable cost and providing coverage up to an individual’s base salary multiple.
Supplemental life policies are also available with payroll deduction premiums paid, although employer-sponsored policies may not meet all of your family’s needs.
Group Term Life Insurance
Group term life insurance, often offered as part of employee benefits packages, provides individuals with protection to help pay off debt or provide for family members after death. Group policies tend to be much cheaper than individual policies as the insurance company can spread costs across a group instead of just one individual policyholder. Employers and associations frequently offer this form of life coverage to employees at reduced premiums; it may even be tax-deductible in certain instances.
Employers typically cover most or all of the premiums for this form of insurance and it usually provides fixed amounts of coverage. Usually tied to an employee’s annual salary, some employers also offer group term life policies where benefits are based on multiples of an employee’s annual earnings at certain thresholds.
Individuals who qualify for group term life insurance policies typically don’t require medical examinations in order to obtain coverage, since insurers can take on more risk when covering multiple people. That being said, each policy might have some restrictions in terms of spouse or children coverage as well as limiting how much an employee can receive overall.
Some employers offer additional life insurance riders, such as accidental death and dismemberment (AD&D), as part of group policies for employees. These additional riders can add value to a benefits package and make group life insurance even more appealing to employees. Group life insurance can provide your family with financial security; as part of building your overall financial plan it should be something you consider.
Just keep in mind that group life insurance policies may not provide as much flexibility, or continue being offered when you leave a company or retire; and if their amount doesn’t cover your expenses enough, additional coverage can always be added through individual policies. If you need help getting enough coverage, check your workplace or association benefits or consult with a financial professional for advice.
Whole Life Insurance
Some employers provide employees with whole life insurance as part of their employee benefits package. This type of permanent coverage doesn’t depend on your health, yet may cost more than term life policies. If this option is available through your employer, enrollment can usually be completed as part of either new-hire paperwork or annual benefits re-enrollment; depending on the company involved this coverage may even be free or payment may be taken through payroll deduction.
Your employer pays for life insurance at different rates depending on various factors, including how much coverage and type of policy you select. A basic employer-provided policy usually only covers up to one year’s salary – enough for your mortgage or debt payments but less for funeral and childcare costs.
Employer-sponsored life insurance typically falls short of meeting the needs of your family in the event of your death, while its policy typically ends once you leave employment. To continue paying for life insurance after leaving employment, private providers will likely need to undergo underwriting procedures for new policies if you want coverage beyond expiry.
Another concern of employer-sponsored life insurance is its taxability; as with most employee benefits, including life insurance. Your personal circumstances will likely dictate a different tax treatment of this benefit than others may receive.
Whole life policies build cash value over time, which you can put to good use during your lifetime. Certain insurers such as Guardian Life Insurance Company of America, MassMutual and MetLife even allow policyholders to invest their cash value accumulated from policies, which could potentially increase life insurance payouts should an accident occur.
People often underestimate the cost of individual life insurance policies, so it’s better to overestimate than underestimate. A great way to start is with a quote from an established life insurance agent who can give personalized quotes for various policies and options available to you.
Final Expense Insurance
Final expense life insurance (sometimes known as burial insurance ) provides coverage for end-of-life costs such as funeral and burial expenses as well as legal issues and debts such as mortgage loans. Final expense coverage is designed to fit into most people’s budget, with lower premiums than other forms of life insurance policies. As well as offering smaller death benefits and riders that help reduce cost, final expense plans often offer other features which help keep costs down. An accelerated death benefit rider provides part of the policy’s death benefit to an insured before they pass, thus reducing what beneficiaries receive upon the insured’s death but providing much-needed financial relief to grieving families dealing with medical bills and debts at this difficult time.
Many employers provide employees with some minimal final expense insurance at no cost; additional coverage can usually be purchased through payroll deduction. Unfortunately, however, these employer-sponsored policies generally offer much less coverage than necessary to cover mortgage, debts and expenses after death.
Cost of final expense policies varies based on age, sex, health, tobacco use and desired coverage amount. Prices tend to be higher for those over the age of 70 in poor health or seeking coverage with no waiting period or additional waiting period requirements – for instance a 65 year old female seeking $10,000 without any waiting period may pay between $40 and $80 monthly depending on her insurance carrier.
Final expense policies can differ dramatically in cost between insurers, so it’s wise to compare quotes before selecting an insurer. Each provider sets their rates based on underwriting criteria and actuarial data. To find coverage that fits best for you and your circumstances, the best approach is speaking with an independent life insurance agent who can compare multiple policies at once and find you an affordable plan tailored specifically to you.
Disability Insurance
Disability insurance helps provide some protection against injuries or illnesses that prevent an employee from working, typically offered as part of employee benefit packages with premiums deducted through payroll deduction. Policies typically pay out either short- or long-term amounts depending on your policy’s terms and your individual needs.
Each disability policy has its own set of criteria that must be fulfilled to receive benefits, with different definitions of disability that apply depending on which policy it falls under. Some policies define disability as “own-occupation,” meaning you could receive benefits if injury or sickness prevents you from performing your current occupation – this definition is typically seen among employer group policies; others use more generalized descriptions that cover any occupation that could potentially fit within their definition based on education, training experience station in life physical capacity as a factor.
Disability insurance policies often involve an underwriting process that includes an exam or review of medical records to ascertain eligibility and premium amounts. Your choice of policy type, the risks associated with your work environment and any risky hobbies you engage in as well as age will all have an effect on this cost; typically younger workers typically pay lower premiums.
As soon as a claim is submitted for disability insurance, the insurance provider typically will conduct an independent assessment (APS). This step provides objective evidence that you are disabled.
Disability insurance can be an essential tool for your financial security, but without the appropriate policy in place it can be challenging to access funds needed to cover losses. With some research you should be able to find one that best meets your individual requirements.
