While the NHS covers a lot of wellness needs, that coverage will only get you so far. However, certain companies are taking care of their employees’ wellbeing, and including health benefits as part of their overall corporate wellness package. That said, you may not have taken the time to review your company’s benefit plans and may not be aware that what’s available and what you’ve selected could fall short of meeting your needs. So, does your benefit package really measure up?
According to a 2011 study by the ADP Research Institute, 40% of employees don’t understand their benefits, which means that there may be resources for retirement planning, health care and insurance available to you that you are underutilising. Sometimes, employers offer benefits that promise a good start toward financial protection, but that’s all it is; a start. You may not realise that you may have to chip in additional coverage to help fill in the gaps. Melissa Millan, senior vice president, Massachusetts Mutual Life Insurance Company (MassMutual), explains, ‘When a household income earner is in good health and able to bring home the pay cheque every week, families often forget about those other benefits available from the company. Everyone should carefully review their benefits, and determine if any additional insurance protection might be needed to keep the family finances on an even keel if something should happen to affect that weekly pay cheque.’
Often, the benefit areas you leave untouched – or just plain don’t understand – are your life insurance and disability insurance. If your employer does offer you these benefits, it’s well worth considering how they can help you out financially. Let’s take a look at them both in a little more detail:
1. Life insurance: As part of their benefit package, many employers will offer group term life insurance with the option for you to purchase additional coverage on your own by having the additional premium payments deducted from your salary. You might want to consider purchasing additional coverage in this way because getting it through your employer means that you do not need to provide any health information or be pre-approved medically. Outside of the workplace, it’s likely that you would have to go through these procedures. Relying solely on group term life insurances is a risky move, as it’s offered as a benefit via your employer. Your company could decide to discontinue offering the benefit, or you could lose your coverage if you leave your company and there are no options to take the coverage with you.
The wisest course might therefore be to consider balancing the benefit offered through your employer with an individual life insurance policy. As you are the owner of your individual life insurance policy, you can get the coverage you need and take it with you if and when you decide to leave the company. Make sure that you understand your ability to keep the coverage, regardless of your employment relationship, whether you purchase additional insurance at work or outside of work.
2. Disability Insurance: If you suffer an illness or injury that prevents you from working for an extended period of time, your employer may provide group long-term disability plans that replace a portion of your income. However, there may be a larger gap between the amount of salary replaced by the group insurance and your pre-disability income than you realise. It’s quite likely that your group plan only replaces a portion of your total salary. On average, group plans cover about 50 to 60% of what you earn. Moreover, if you earn commissions or income from bonuses, your group disability plan probably won’t cover this. Therefore, having an individual disability income insurance policy can help reduce the income gap.
