Your employee benefits plan is a valuable component of your total compensation package. It usually provides coverage for some of life’s unexpected challenges, but what if you need more? That’s where optional employee benefits come in. Optional benefits are an added layer of protection for those who need or want more coverage.
Coverage for your situation
Each person is unique, and each situation is unique. As a result, the choice about whether or not to purchase optional employee benefits depends upon the individual. Optional benefits are a form of insurance to protect you against financial loss. You may purchase them to increase the coverage you already have, or to secure coverage that is not already included in your employee benefits plan. Whether or not to purchase optional benefits is closely tied with the coverage you already have, as well as how comfortable you are with risk.
Your comfort level with risk is likely tied to your situation. If you have a young family with several people depending on you, you’re likely uncomfortable with a higher level of risk. If you had an accidental death or developed a serious illness, you must consider how those dependents would meet the financial obligations of your household. Is the coverage you already have enough? If the answer is “no,” then optional benefits might be a good choice.
If instead, you have a nice nest-egg of savings and you don’t have any debt or dependents, you’re likely able to accept more risk. Perhaps you know that if your income was lost due to an accident or serious illness, you and your family could maintain your standard of living for some time. In this situation, you are more likely to be comfortable with a lower level of coverage.
Playing the Odds
Unfortunately, accidents and serious illness are a reality for some Canadians. In Canada, accidents are the number one cause of death for people under 39 years of age, and they’re the fourth leading cause of death for people of all ages.
When it comes to serious illness, it’s hard to find someone who has not been affected by it. In Canada, a stroke happens every 10 min. A heart attack happens every 8 minutes. Someone is diagnosed with cancer every 3 minutes. The numbers can paint a bleak picture, but there is hope. With modern medicine, many people who experience a critical illness recover. The challenge is that recovery is often a long road and without proper coverage it’s financially draining.
Accidents and serious illnesses jeopardize more than just your health. The financial hardships of losing your income threaten your quality of life, and that of your family. It could happen to you; evaluating your coverage and your risk tolerance is essential to making the right choice when it comes to purchasing optional benefits.
Common Optional Benefits
Optional benefits are an additional layer of coverage on top of the benefits you already receive through your group benefits plan. The most common optional benefits available are:
- Optional Accident and Serious Illness – This coverage is the more sophisticated cousin of traditional Accidental Death and Dismemberment coverage. Some of the highlights include:
– Lump sum payment if a covered person dies as a result of an accident
– Varying amounts of coverage if a plan member loses limbs, eyesight or speech as a result of an accident
– Covers accidents on or off the job
– Lump sum payment if diagnosed with a covered critical disease or serious illness
– Lump sum payment if paralyzed
- Optional Critical Illness – This coverage pays while you fight and/or recover from a covered critical illness. Some highlights include:
– Lump sum payment when you survive 14 days after the diagnosis of a covered critical illness
– Wide range of illnesses are covered (examples include: stroke, dementia, blindness, life threatening cancer, organ failure and many more)
- Optional Life – Your beneficiary receives a lump sum payment upon your death. It really is looking out for those who are left behind.
Complimenting your existing coverage
The simplest way to look at optional benefits is that they can be purchased to complement the existing coverage you have through your group benefits plan. It may mean increasing the coverage level you have for a specific benefit (like ASI) or adding a type of coverage that is not included in your plan.
Usually, you’ll get better rates than if you purchased these benefits under a personal plan. This is because rates through optional benefits incorporate your employer’s group buying power. The rates do depend upon your age, smoking status, industry and other factors, but generally, they’re more favourable than going it alone. You’ll also have the convenience of having them coordinated through the Plan Administrator at your company.
Sign me up!
If you’ve made the choice to apply for optional benefits to supplement your existing coverage, your first step is to talk to your Plan Administrator. In order to take advantage of NOT having to provide medical evidence, you will have to apply for optional benefits within a certain timeframe after you become eligible (usually 31 days).
If you do decide later on that you want to purchase optional benefits, you may have to complete a medical questionnaire or supply evidence of insurability.
One of the most convenient parts of purchasing optional employee benefits is that you will pay for them through payroll deductions. Your Plan Administrator will get you all set up.
Good Advice is Key
Are you interested in learning more about optional benefits and if they are right for you? Talk to the Plan Administrator at your company. If you’re a Plan Sponsor and you want more info on supporting your employees with optional benefit offerings, talk to one of our licensed advisors on the phone, or contact us for a comparison quote.
Whether you’re looking for extended health and dental coverage, disability coverage, or life and critical illness coverage, GroupHEALTH has affordable benefits packages that work as hard as you do.