Our first job can be overwhelming with the new beginning, the change of environment, as well as all of our new employee benefits that come along with our total benefits package. It is important to fully understand our employee benefits in order to maximize our options. Along with our annual salary our employer usually offers us several insurance options in our total benefits package. These insurance options include Medical and Dental insurance, as well as Short Term and Long Term Disability insurance along with Life Insurance.
Employers offer a fixed number of benefit credits to their employees (based on their family situation) along with various levels of insurance coverage. Each different level of insurance has a cost, which is deducted from the total amount of our benefit credits. If we choose insurance coverage that is more expensive than our total amount of benefit credits the difference will be deducted from our pay check throughout the year.
Medical and Dental Insurance Benefits
Medical and Dental Benefits are the most important factor when choosing our new employee benefits. These benefits include various insurance coverage’s such as prescription drugs, doctor visits, eyeglasses, specialist consultations, as well as dental procedures and routine check-ups.
While most of our other employee benefit options are chosen on an annual basis, there is usually a 2 year lock in period for Medical and Dental insurance benefits. The level of insurance coverage that we choose is also applicable for our spouse and children.
Short Term and Long Term Disability Insurance
Short Term and Long Term Disability Insurance are often referred to as Income Replacement Plans or Income Supplements. In case we are hospitalized or otherwise unable to work Short Term and Long Term Disability will provide us with a regular income to supplement the loss of income from our employer.
Short Term Disability Insurance is usually available for the first 6-8 weeks of our absence from work. It can supplement 80% to 100% of our regular income. Long Term Disability Insurance usually provides an income supplement of 50%-70% depending on the option that we choose. Long Term Disability Insurance can also be adjusted to the annual increase in the cost of living; this is referred to as COLA, cost of living adjustment. Some insurance plans have a maximum number of years that can be covered by Long Term Disability Insurance.
Personal Life Insurance
Our employer usually offers a base life insurance which is equal to the amount of one times our annual salary. This is included in our base insurance coverage and is not deducted from our benefit credits. We can buy additional segments of personal life insurance equal to our annual salary such as two, three, or four times our annual base salary.
Additional Life Insurance can also be purchased for our spouse and our children, usually in increments of $10,000. Upon death our Life Insurance proceeds are paid directly to our beneficiary as a lump sum payment. Life Insurance proceeds do not pass through probate.
Emergency Travel and Out of Country Insurance
Emergency Travel Insurance and Out of Country Insurance protect us while travelling abroad. Travel Insurance usually covers expenses such as emergency procedures and hospital visits while we are out of the country. It also provides a referral service which gives us access to the best doctors in the country that we are visiting.
Emergency Travel and Out of Country Insurance is available for an unlimited number of vacations throughout the year, however it usually only covers a particular number of days such as the first 17 or 30 days of our trip. It is important to note that this insurance does not cover loss of baggage or trip delays and cancellations, this is a separate form of insurance that may be provided by our credit card company or the travel agency.
Critical Illness Insurance
Critical Illness Insurance provides us with a lump sum of money if we are ever diagnosed with a fatal disease such as cancer. In my experience I have seen Critical Illness Insurance sold in increments of $25,000.
Our Total Benefits Package is a great added benefit which is offered to Employees at discount group rates by our Employer. We should take advantage of these because it could cost a lot more if we needed to buy these insurance coverage’s on our own.
Photo by Ted Percival