What you need to know about your work insurance
Every once in a while, I’ll run into someone who feels really secure from a risk management point of view because of the amazing benefits they have through their employer. This is because the insurance plan at work is a great way to get coverage.
Here are three advantages to these plans:
1. They do not usually require you to provide any medical evidence
2. They are usually much lower cost than going out on your own
3. Often your employer may be sharing in the cost.
However, there are a few things that are perhaps deficiencies or risks that you need to take the time to understand:
1. The very first thing you need to know about your work insurance plan is that because it is not medically underwritten (meaning: you didn’t need to do a medical test to get approved), the total amount of insurance you are eligible for is limited. Depending on your personal situation, this may or may not be enough. Usually, until you have done the math on it, you don’t really know. The easiest way to get around to this is by getting the help of a financial planner to guide you through the process.
Avoid Financial Pitfalls by Finding Your Blind Spots
2. Did you know that the insurance rates for your group could be changed at any time? Possible reasons this could occur is due to the age demographic of your company employees, or even excessive number of claims being made. In this case, you do not really have any control over the changes. However, if you do want to protect yourself against unexpected changes, it is best to talk to a financial planner to see what options would best fit your personal situation.
3. There are four types of insurance: life, critical illness, disability, and health. Most group benefit plans only cover two or three. Do you know which of those are covered under your plan? Do you know how much is covered? Do you know if they pay-out and when they pay-out? For example, you probably have a disability plan, but does it cover you if you had an incident while you were at home? How long does it pay out for and will it cover you if you can’t work your specialized job but can work something else? The best way to learn your coverage is to get in touch with your company’s HR team to obtain the detailed coverage booklet and asking a financial planner to review it with you.
4. Everything is hunky-dory when you have a job. Your employment benefits cover you. But what happens in the case that you lose your job? Or, you switch companies and there is a weekend or a week between your old job and your new one? What happens to your group plan? Often, when your job ends, so do the group benefits. Find out which coverage can keep if you were to leave, and which ones you can’t. And to have increased certainty, cover yourself with some personally owned insurance where you can be in control.
If you would like to further discuss your options of coverage or review your work insurance and identify the missing gaps, send me an email at shyam@growyourwealth.ca to schedule a 30-minute virtual coffee!
