Sandy Lachapelle’s Column: Payroll Myth

When investigating topics that may be covered in this column, colleagues regularly suggest dealing with the false sense of security provided by the protection provided under the employer-provided group insurance plan. To do.

I often hear the phrase “I’m well protected and already insured”, but that’s true.

If you benefit from such a plan, start by saying that you are privileged! Indeed, it certainly includes more generous coverage than government drug insurance and certainly reimburses the care of some medical professionals. In addition, you probably don’t need to buy it when you travel, as it probably includes travel insurance. On the other hand, the protection available from life and disability insurance may be limited or unsuitable.

Theoretical “long term”

By performing an analysis of your needs, financial security advisors will certainly make a salary insurance recommendation. The ability to generate income is paramount to ensuring financial independence until it is achieved. In fact, achieving long-term financial goals is based on long-term revenue forecasts. In addition, having so-called “dependents” can not only be a “financial burden” for those around them, but also impair their quality of life if they become seriously ill without proper insurance. ..

“I’m already well protected. The employer’s plan has long-term disability insurance,” you might say. True and false! Virtually all group insurance plans include short-term and long-term payroll protection, but this is actually an important myth, and most people are interested in choosing words that go beyond the title of this guarantee. It is maintained because it is not.

The word “disability” is exactly what it is, but the fact that you haven’t read the definition in detail, especially in insurance, explains this false sense that you are well protected. However, if you think about it for a moment, you can see that insurance allows you to receive a disability pension up to the age of 65, but in reality it is unlikely that you will benefit from it until this age.

Disability is generally defined as the inability to perform the normal duties of your job, but unfortunately, after the first 12 or 24 months, that definition is much more limited. In most cases, you need to prove that you cannot perform regular employment tasks or other beneficial employment, depending on your age, training, and experience. Good luckā€¦

In short, it rarely becomes a real long-term protection, and that’s the only reason why premiums are lower than the products you may already have shown by your advisor. Alternate jobs that you could exercise in the eyes of an insurance company will probably not allow you to reach your financial goals.

With personal payroll insurance, you can get a product that suits your needs, with a definition of disability and a better guarantee. In addition, it belongs to you and you will be protected if you change your employer.

Optional life insurance

Life insurance for this type of plan is usually a lump sum based on a multiple of salary and offers the option to purchase additional insurance with or without an underwriting process.

Second, a fairly widespread myth is that it is cheaper and easier to cover life insurance needs in this way. However, the evaluation process is still an evaluation process. Most importantly, covering your life insurance needs through your workplace plan will force you to start over if you change jobs. When that time comes, it will be difficult to insure and you will have to pay new premiums according to your age.

Finally, I would like you to understand it well. As an employer, you are giving your team a great gift by offering such a group insurance plan. And if you have such a plan, as an employee, you are one of the privileged people! From this column, keep in mind that this diet is not a panacea that automatically and completely covers risk.

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