Understanding Employee Benefits

Understanding Employee Benefits

You know you should read your employee handbook, but have you? Here’s what you need to know about long-term disability benefits.

When was the last time you felt like curling up with a good employee handbook? 

Never? I’m not surprised. Most people think of employee handbooks as tedious documents they know they should read, but typically don’t. 

But however tedious, these handbooks do contain important information you need to understand. For instance—your life insurance and disability benefits—the kind of things nobody wants to think about. But here’s the thing, if you ever need those benefits, you (and your family) will be really grateful that you took the time now to understand what is and isn’t covered. Unfortunately, many people never read their employee handbooks, which can leave them underprepared when they discover those benefits aren’t as comprehensive as they assumed they would be. 

Really good reasons people don’t read their handbooks – even though they should. 

Even though you know you should read that employee handbook in order to make smart decisions about your financial wellbeing, there are some legitimate reasons that may be getting in your way. 

#1 Who has time?

One of the main reasons that people put off reading their employee handbooks is that they’re simply too busy. If you’re juggling lots of responsibilities and tasks, settling down with that thick employee handbook can seem like a low priority. 

#2 Even if I do read it, I won’t understand it.

Many employee handbooks are written in insurance industry jargon and legalese, which can be ridiculously convoluted, complicated, and frustrating for regular people to wrap their heads around. Referring back to reason #1— if you’re already pressed for time to read your employee handbook, you probably don’t have the bandwidth to also decipher its meaning. 

#3 I don’t need life or disability insurance because my employer provides it. 

Lots of employers offer their employees limited life and disability coverage. While that’s a nice perk, employer benefits can give you a false sense of security if you believe they will cover everything. The truth is, to avoid unpleasant surprises, you really do need to understand the details of your benefits. Here are a couple of examples of people who didn’t fully understand what their employer-provided benefits actually covered: 

Joe’s Life Insurance Surprise

Joe believed that, in the event of his death, the life insurance policy his employers provided in his benefits package would pay his beneficiaries the full amount of his salary. However, when he did die unexpectedly, his wife discovered that the policy only covered a percentage of his earnings, leaving her and their kids to deal with a significant shortfall. 

Tonya’s Disability Disappointment

Tonya thought her employer-provided disability policy would replace her full salary in the unlikely event she ever became unable to work due to an illness or injury. However, when she did become disabled and filed to claim her benefits, she discovered that her policy only replaced a percentage of her base salary, didn’t factor in bonuses, and left her with a large financial gap between what she’d anticipated earning and what the policy actually paid out. In addition, these benefits were also subject to income tax, further reducing the amount she had to live on. 

In both cases, Joe’s family and Tonya were left facing a difficult financial situation that could have been avoided if Joe and Tonya had taken the time to read their employee handbook and understand their benefits.

It’s worth it — You’ll feel better when you’re done

Ideally, employers would write their employee handbooks in plain language that clearly outlines the benefits employees are entitled to, including what is and isn’t covered by life insurance and disability benefits. But until that happens, it’s important to bite the bullet and make reading your employee handbook a priority. And if there’s something you don’t understand, ask questions. 

If you’re still not sure what’s covered under your employer benefits (or if it will be enough), I speak fluent insurance. I’d be happy to take a look at your employee handbook, walk you through the details, and help you make well-informed and surprise-free decisions about your financial future. 

You’ll feel a lot better right now knowing your and your family’s financial future is secure. 

If you’d like me to review your employer benefits and make sure you’re covered, simply drop me a note.  

What our clients say....

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When I decided to review my life insurance policies, I called Howard. He suggested a new policy which provided 50% more coverage for approximately 60% of my existing premiums. He also came up with a 20-year strategy to protect my wife and children where, as my obligations decrease, so will my coverage and premium payments. We all work hard to create a good life for our families. Howard placed my coverage with a quality insurance company that will provide me with peace of mind.”

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“I had too many random life insurance policies. I wasn’t sure which to keep and which to cancel. Howard patiently explained each one and helped me consolidate them into one whole life policy that makes sense. Howard genuinely cares about his clients. I feel so much better knowing my loved ones will be cared for if something were to happen to me. Life insurance is a difficult conversation to have. My husband always avoided the subject. As a nurse, I know how important it is to have your affairs in order. Howard makes it easy.”

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“I went to Howard for my first life insurance policy. Then I had a child and bought a new home. So I went back to make sure, if something were to happen to me, my wife could keep our home and my daughter could go to college. Howard is easy to like and he genuinely cares. He’s good people. He took the time to walk me through the policy and advised me on what I needed and what I didn’t need, regardless of if it benefitted him. Why would anyone buy insurance online when someone like Howard is there to help?”