Employee Insurance Programs
For the employees to be intrinsically and extrinsically motivated, insurance programs are a good remedy, among other rewards like increased pay packages, recognition, and promotions. Knowing that one is covered in case of an accident or death increases the trust an employee has in the organization. It also leads to increased productivity and zeal when undertaking a given task. There are various insurance programs that employees can enroll in, including the term life insurance, the universal whole life insurance, long and short term disability insurance programs among others. Each of the insurance program has its distinct advantage(s) over another as they cover different policies. This being the case, this paper will aim at identifying the different types of insurance programs that may be available in an organizations compensation and benefits package.
Term life insurance
Term life insurance/assurance is an insurance program that provides protection or cover to an individual at a given fixed rate for a limited period (Hunt & Hunt, 2004). After the expiry of the agreed period, the insurance expires, prompting the client to either renew the insurance contract or cease the coverage. Some of the advantages of term life insurance include simplicity, cheap among others as discussed below.
This form of protection is easy to understand, since one pays a low fixed monthly premium that is based on the term life and the type of coverage one chooses. Another advantage of term life insurance is the fact that it can be purchased to meet specific personal and/or financial obligations, for example, payment of the loan. The term policies can be converted back to back upon the expiry of the policy. This therefore implies that it can be used to cover short-term needs or temporary obligations. Upon the expiry of the policy, one has the option of converting the term policy with another one which is more permanent. This explains its flexibility status and guaranteed prices upon the execution of the policy. With a term life insurance, one can be covered for a fixed length of time say 5 years, 10 years, 15 years, etc. depending on one’s take.
Universal whole life insurance
This is a type of cover that insures a person as long as one lives (Hunt & Hunt2004). Under this program, one pays the same premium for a specified period of time to qualify for the benefits (usually death benefits). It is a form of life insurance that has a saving feature, whereby, one may end up paying higher premiums in the beginning when compared with the term life. Usually, in this type of an insurance undertaking, the death benefits are fixed and therefore is guaranteed upon the execution of the program.
The advantages of the whole life insurance include the fact that one can insure several/multiple individuals under the policy. At the same time, it has a limited payment option, implying that one chooses the duration of paying the premiums, based on a person’s priorities. For example, one may pay for 10 years, 20, 30, or even a 100 years. At the same time, the premiums paid, the face value as well as the surrender values are all stipulated under the policy and are therefore guaranteed.
Accidental death & dismemberment insurance
The AD & D is an insurance policy that covers death as a result of an accident and therefore pays the beneficiaries (Beam& McFadden, 201). It is limited in nature since it only compensates causes which relate to death as a result of accidents. The advantages of this type of insurance policy is that upon the death of a client through accident, there is a guaranteed payment regardless of whether the client had taken another insurance cover (Hunt & Hunt2004). At the same time, it covers bodily injuries that and sight problems that may have arisen as a result of an accident. This includes the loss of fingers, limbs as well as sight and in case of permanent paralysis(Hunt & Hunt2004). A person under suffering from the above conditions may benefit from AD & D policy up to the amount guaranteed under the policy. All in all, the type of premiums paid and the injuries covered vary depending on the insurer and the package and are stipulated in the insurance policy. In the US, the common types include the group life supplement, voluntary, travel accidents as well as the dependent covers.
Long and short term disability insurance
The short term disability insurance and the long term disability insurance are designed to provide alternative income to the client and the family or beneficiary in an event when one is unable to work as a result of accident or sickness(Hunt & Hunt2004). The conditions to benefit from the disability insurance policy vary from state to state. All in all, both long and short term disability have their advantages.
The short-term disability insurance benefits the client after an accident orsickness leading to disability after a predetermined period (Robinson, 2006). This makes the policy guaranteed, since upon being disabled, the benefits are awarded after a specified period. It is short termed and therefore may benefit victims cover financial losses that may have occurred abruptly. It is a form of saving or protecting one’s income, in a situation that one is unable to work.
The long term disability insurance policy provides a comprehensive cover in case of accidents or sickness or as directed in the policy agreement(Hunt & Hunt2004). It involves covering the short term needs in addition to a personal unique needs. The benefits are normally paid on a monthly base and may run up to the social security retirement age.
Beam, B. T., & McFadden, J. J. (2001). Employee benefits. Dearborn Trade Publishing.
Hunt, L. R., & Hunt, L. R. (2004). A lawyer’s guide to estate planning: Fundamentals for the legal practitioner. American Bar Association.
Robinson, J. M. (2006). Changing Faces: America’s Wealth Advisors. Changing Faces WealthAdvisor.