02/14/2016
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When you get a job, your employer may have informed you that aside from a paycheck, you will be receiving some additional benefits. Some of the most important benefits a company may offer come by way of insurance. The typical insurances that a company may offer: health, life or disability. Depending on your unique situation, it will determine what benefits you select. Also, some employers may give you numerous benefit options to choose from, while others may offer the bare minimum. Nevertheless, read through the entire benefits packet that they give you!
Most people are well aware of the importance of health insurance but not so much when it comes to life and disability insurance. Here's a recommendation... take some time to truly determine how much life and disability insurance you need. The life insurance that's offered through your employer is the cheapest that you will find, typically because your employer is fronting most, if not all, of the premium payments for you. You will generally find that they may offer flat rates of coverage at varying cost to you or they may have it where you're entitled to an amount equal to one or two times your salary. If what they are offering isn't enough, consult an insurance agent to determine how much additional coverage you need to fill your gap. Having adequate life insurance is of the utmost importance because if your household has two wage earners and one passes away, or the breadwinner of your family is no longer here, the remaining family members would most certainly appreciate having money for the final expenses and the ability to maintain their current lifestyle. The grieving phase will be challenging enough, but adding financial troubles into the mix, just makes things that much tougher on your family.
When it comes to disability insurance, the same rules apply. Your employer is fronting most, if not all, of the premium payments for you. Many of us don't see the value of having disability coverage, but here's some food for thought. If you were seriously sick or injured and unable to work, how would you pay your bills? If you answered that question by saying you have an adequate amount of emergency funds (3-6 months worth of expenses) saved, then you may be okay. If you don't have such an amount, then disability coverage becomes your savior. Essentially, it enables you to maintain your current lifestyle. What happens for the majority of people is that they fail to have the all-important emergency fund, which results in them having to tap other resources like their investment or retirement accounts, or credit cards. None of those sources should be utilized if at all possible. Your employer may only offer short-term disability or a combination of short and long-term disability coverage. Remember, read your benefits packet because this is something you NEED to know. Again, just like with life insurance, if what your company offers isn't enough, consult an insurance agent to determine how much additional coverage you need to fill your gap. [Just so you know, you will never be able to get 100% disability coverage, primarily because if you could get 100% of your earnings without working, then clearly you would never go back to work.]
Having a firm grasp of your insurance offerings through work is critical. There may be gaps within your overall insurance plan and you most certainly need to make sure they are filled. Insurance is THE foundation of a financial plan. If you are not adequately protected, then you are putting your investment and retirement accounts in serious jeopardy. Think of it this way, if you were going to build a house, would you start on the second floor? Of course not!! You set the foundation, which allows you to build the remainder of the house. There have been numerous studies conducted about the staggering number of people who are underinsured in this country, please don't let this be you. If you don't care much about insurance studies, ask a family member or close friend if they or someone they know has been negatively impacted by having an inadequate amount of insurance... then you will understand.
Source: Ezinearticles.com
Jasper's passion is to make people feel a sense of security about the financial decisions they make. Having worked in the financial services arena for almost a decade, he realizes that most people have not had a "real" discussion about their finances. Jasper not only assists clients with an array of financial needs, he also volunteers through a non-profit, the Urban Financial Services Coalition (UFSC). Their goal is to promote financial literacy throughout communities via workshops/seminars, to create networking opportunities for minority financial services professionals, and to expose youth to careers in an effort to increase the pipeline of minority financial services professionals.
© 2016 Jasper E. SmithThe views and opinions expressed in these articles do not necessarily reflect those of College Central Network, Inc. or its affiliates. Reference to any company, organization, product, or service does not constitute endorsement by College Central Network, Inc., its affiliates or associated companies. The information provided is not intended to replace the advice or guidance of your legal, financial, or medical professional.