When you have existing Group Insurance…
“I have benefits at work, I don’t need Individual coverage.”
This is a very common response from individuals who work for an organization that provides a benefits to its employees.
We encourage our clients to ask themselves two simple questions:
1.) Is the coverage offered through my benefits plan sufficient to protect me and my family?
- Life Insurance: A typical life insurance benefit amount offered by employers is 1 x income, or a flat benefit amount between $25,000 and $50,000. If you have someone that depends on you financially (spouse, children or aging parent), this is surely not enough to protect their future.
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- Critical Illness: The majority of benefit plans offered by employers do not offer critical Illness Insurance. If they do, the benefit amount is usually low – between $10,000 and $25,000. Coverage may also be limited in comparison to an individual Critical Illness plan.
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- Disability Coverage: It is not uncommon for a group disability plan to leave you underinsured when it comes to the percentage of your income it covers. The higher your income, the more likely this is the case – otherwise known as reverse discrimination. The maximums outlined in the plan, taxation and how your income is viewed are all potential reasons why group insurance may not provide you with the right amount of coverage.
In addition, Group Long-Term Disability contracts typically include an “own occupation” definition of disability for the first 24 months, then switch to “any occupation” thereafter. In the event of a long term disability, your benefits could cease after 24 months and force you back to work at a lesser paying job than your own.
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At SecurePlan, we will do a full review of your group benefits plan with you. At the very least, you will gain a better knowledge of the benefits you have at work.
2.) Do I plan to work for this employer until I retire?
- If the answer is NO, you should explore the options available for individual insurance. Should you move to another organization, it is not guaranteed that they will have a benefits plan in force. Should you become self-employed, depending on your health, you may not be insurable for individual insurance at that point in time.
- If the answer is YES, be careful. Group insurance contracts are between your employer and the insurance company. As an employee, you have no control as to whether or not your employer will continue to offer benefits in the future.
Contact us today to hear about Jeff’s story!