Many jobs offer their employees several options when it comes to workplace benefits. The employer can do this because this type of coverage is purchased on a “group” basis that simplifies the process for the employers and insurance companies.
Long-Term Care Insurance
Long-term care insurance is for people who cannot fully care for themselves. They need long-term care that extends beyond time in the hospital. There are two stipulations a person must meet in order to qualify for long-term care insurance. First, the policyholder must be unable to perform “Activities of Daily Living.” These activities include bathing, continence, dressing, eating, toileting and transferring. Second, the policyholder must have some sort of severe cognitive impairment, like Alzheimer’s disease. Other causes of cognitive impairment include accident, prolonged illness, disability or aging. This coverage might also extend to the policyholder’s spouse.
Two types of disability insurance are available as a work benefit. Short-term disability provides income when an employee becomes temporarily disabled due to accident or illness. There is a waiting period before the insurance pays benefits. The benefits will pay out for 26 weeks. After a period of 26 weeks, short-term disability ceases. These benefits replace 50-67 percent of an employee’s income.
Long-term disability insurance is similar to short-term insurance, except it covers employees who become disabled and are unable to work for six months or longer. The benefits, which are about 50-60 percent of the employee’s income, can continue to retirement age. Permanent disability is not a requirement, but the employee should have been a full-time employee for at least a year.
The Social Security Administration also provides benefits for people who meet their requirements. However, benefits are reduced by the amount the person receives from workers’ compensation. Workplace benefits of long- or short-term disability insurance do no reduce the benefits.
Accident insurance provides additional help in addition to primary insurance. For instance, health insurance covers medical expenses, but not thinks like daycare, utility bills, and other daily expenses. A group accident insurance plan pays cash to you to use in whatever way you choose. There is no medical stipulation and you can’t be turned down.
The cash benefit helps pay expenses for death, dismemberment, dislocation/fracture, hospital stays, intensive care, ambulance, medical expenses or outpatient treatment.
Critical Illness Insurance
Critical illness insurance pays money to the policyholder if they are stricken with a specific, serious ailment. Acute, not chronic illnesses are covered. Basic policies payout if the policyholder gets cancer, or has a stroke, heart attack, kidney failure, or coronary artery bypass surgery. More in-depth policies offer coverage for additional issues like organ transplants, and additional diseases, including Lou Gehrig’s disease.
Critical illness coverage is a voluntary benefit. The policyholder pays the full amount of coverage, but at a discounted group rate.
Universal Life Insurance
Universal life insurance gives the policyholder a permanent death benefit and flexible premium payments. The premiums, minus insurance charges, become a part of the policy account value. Monthly charges cover policy expenses, but as long as the account value is available after monthly charges, the policy remains active. Policyholders have the option to increase or decrease premiums within limits set by the insurance company.
The policyholder can access the policy’s cash value through loans and withdrawals. They can also customize coverage through optional features.
Beneficiaries receive the death benefit, upon the death of the policyholder. However, the benefit is minus any outstanding policy loans and interest due.