So, let’s talk about this for a few moments. You landed that almost perfect job you’ve dreamed of and the income/salary is what YOU think you’re worth. You were told that you have a “Great Benefits package” to include the following: Employer-based paid Medical, Life insurance, Dental, Vision, and other provided benefits like “PTO” and vacation days along with a matching 201(K) oops… I mean 401(K) retirement savings plan to sweeten the deal. (We can discuss that later). You share the fantastic news with your significant other and all is well and you live happily for years to come. The family grows, the responsibility widens to include a large mortgage, maybe some student loans and consumer credit card & installment debt. You start to tuck away some rainy-day funds but not as much as you want but it’s okay because you are earning a pretty decent salary.
Unexpectantly, a family member becomes ill and has to be taken to the Doctor’s office or maybe even the emergency room. You say to yourself “Thank Goodness for Health Insurance”. Life goes on and your significant other has now become sick and you have to take time off from work to tend to other responsibilities that would have otherwise been handled by someone else. You say to yourself “Thank Goodness for our Emergency Funds”. Now you are back to work and all seems to go as normal until someone in the family needs braces and other matters of oral care. Again, you say to yourself, “Thank Goodness for Dental Insurance”. No worries you got this. Then, something catastrophic happens, you become ill and sick and have to take time off from work now you wind up using your Paid- Time- Off and vacation bank time. The situation becomes critical and has been extended to where you can’t work for a period of time and you thought about you’re Great Benefits package and realize that you didn’t take advantage of the optional benefit add-ons like Long & Short-term Disability and Ancillary products like Critical Illness coverage but “Thank goodness for that matching 401k you had as part of the retirement and you were able to take a loan against it (along with the penalties associated with it). You take advantage of and exhaust the last of your emergency funds to carry you through but Unfortunately, things take a turn for the worse. This critical illness has now morphed into terminal illness. Sadly, no other income is coming in. You can see where I am going with this so I will spare you the details. Oh yeah, the significant other says “well if something happens, thank goodness, we have enough life insurance “What the breadwinner didn’t know was that the employer had only provided a small amount of life insurance coverage and reduced the benefits of the Life insurance to where they were no longer offering it.
Where does this leave the Family now? Surely, they both were depending on each other. What standard of living will the family have? We’ll let’s see. It’s important to note that had the individual considered outside additional coverage other than their employee benefits, it would have been useful such as not only having an insurance policy that is designed to provide a death benefit when someone dies but able to use the Living Benefits within the policy itself. When properly structured, a type of policy can do so many things such as a) provide a guaranteed death benefit that in most cases can allow for flexibility of premiums, b) accumulation of cash, c) used as a savings vehicle, d) Accelerated living benefit riders like, critical, chronic and terminal illness which as you can see plays an important part in setting the financial foundation for families. The story above is not fictional but typical in many average American Families. Don’t take for granted that your employer coverage is the end all be all. Remember, perks like Disability, and Life insurance in most cases are not portable and once it’s gone it’s GONE. Consider a separate individual life policy to supplement what your employer doesn’t cover.
At Ron L. Reed and Associates, our mission is simple, “To be Clear, Concise and Conversational with our potential and current clients. Our values are People, Respect, Opportunity, Passion, Excellence and Loyalty.” Give us a call or get an instant life insurance quote by filling out the form to the right.