What you need to know about workplace benefits
Most employers, especially larger ones, offer health insurance and a retirement savings plan to their workers. But more and more employers are starting to offer supplemental benefits, including disability and life insurance. These benefits are often referred to as workplace benefits, and you should learn all you can about them before signing up.
What are they?
Work benefits, also called voluntary benefits, are a suite of supplemental benefits that many employers offer to their employees. They are intended to fill in gaps that health insurance and retirement savings may not cover. Employers usually do not pay any of the premiums for these benefits, but by offering them through a group policy at work, they make the premiums cheaper for employees.
Who are they for?
Voluntary benefits can be a good idea for anybody, because you never know when you might encounter a disabling injury or illness. However, there are certain employees for which they provide the most benefit. Anyone who is the sole breadwinner in a family or who provides significant care to someone, such as a child or vulnerable adult, definitely should carry these benefits.
How do they work?
Most work benefits are considered catastrophic benefits, meaning they are meant only for extreme cases. If you are hit with a serious, disabling injury or illness, then you must file a claim with the policy. Most of these types of policies pay out a one-time lump-sum benefit, but some, particularly those that cover disabilities, may pay out in monthly amounts. If you meet the criteria for a claim, any money you receive usually is unrestricted, meaning you can use it for any purpose you choose.
Types of policies
There are a number of different types of workplace benefits, and your employer may offer several or just a couple. The most common are accident insurance, critical illness insurance, disability insurance, long-term care insurance and universal life insurance.
The main benefit to signing up for voluntary benefits is the additional financial cushion they provide for things that health insurance might not cover, such as lost income because of an injury or accident.