Having an employer-sponsored group plan is a great start to providing coverage for you and your family. It does not hurt that often the company pays a portion of the premiums! However, not every plan offers the same value to you. It is important to check and review your benefits regularly.
Things to keep in mind:
- Your benefits will terminate when you leave your employment or retire, as you will no longer work for that company.
- There may be gaps in your group coverage. Some group plans are basic and have cost-containment measures to curb the use and reduce annual increases. These are set by the employer.
- The pooled benefits (i.e. Life/AD&D/Critical Illness/Disability/Etc.) focus primarily on the employee. Pooled benefits for the spouse and minor dependents may be minimal or non-existent. Many family members believe they have the same benefits as you, the employee, this is not always true.
Life Insurance – A group plan will often offer a small amount of life insurance. In some cases, this includes an even smaller amount of dependent life coverage for your spouse and minor dependents. The death benefit might be as low as $10,000 or 1x time your salary. Will your beneficiaries require more to live on should anything happen to you?
Critical Illness Coverage – A group plan can offer critical illness coverage and may include dependent critical illness coverage for your spouse and minor dependents. The benefit might be as low as $10,000. Consider the cost of an illness in the family. Will this influence your budget? For how long? You may require more coverage to offset medical expenses or other costs incurred.
Disability Coverage – A group plan can offer short and/or long-term disability coverage to an employee only. This protects a percentage of your income if you suffer an injury or illness. It will not cover a spouse of dependent. How long can you sustain the household if you became disabled? Will the disability amount be enough?
Will your long-term disability benefit be tax-free or taxable? This depends on whether you pay the monthly premium on that benefit. How is the monthly premium divided between you and your employer? This is a critical point when financial planning and will make a difference to your overall family budget.
*Note: Check if you qualify for additional disability coverage over your Non-Evidence Maximum.
Simplified Financial is here to support you. If you are not sure about what you have or if you have gaps, reach out to us. We can help you protect your most valuable assets, you and your loved ones.
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