A Short Lesson on Whole Life & Term Life Insurance

When faced with the wide range of life insurance coverage available, you may wonder what type fits your needs now and what coverage you should consider for future needs. A good first step is to look at two basic types of insurance coverage: whole life and term life. Whole Life Insurance—Cash Value for Your Dollar Whole life insurance helps to provide not only security from financial hardship in the case of a death, but also a cash value component of the policy. Under a cash value life insurance policy, premium payments cover the cost of pure insurance coverage first, including the expenses and mortality factors of the insurance company; the insurance company then accumulates “leftover” dollars to build the cash value of the policy. In addition to cash value buildup in the policy, some insurance companies may provide whole life insurance policyholders with dividend payments—due to lower expenses, lower mortality …

CONTINUE READING

Nonqualified Plans – Baiting the Benefit Hook

Attracting and retaining qualified employees and managers is always a challenge for companies of all sizes. Most employers realize competitive salaries are not the only things desired by the best workers. Sought-after employees also expect compensation packages to include valued benefits. A qualified retirement plan is a traditional component of many employee benefit packages. As a business owner, you’re likely to appreciate the advantages: Your contributions are tax-deductible and accumulate on a tax-deferred basis. However, these plans can be difficult to administer and contain many regulations restricting employee eligibility, participation, vesting, and employee contributions. What’s the alternative? Nonqualified plans offer the flexibility to selectively choose whom you’ll cover and how much you’ll contribute for each individual. Many companies use them to supplement or replace their qualified plans. Although there is a wide range of nonqualified plans from which to choose, executive bonus plans and deferred compensation plans are among the …

CONTINUE READING

Common Employee Misconceptions About Benefits

The only way your employees will get the most out of their benefits, and for you to ensure your organization is getting a good return on its investment, is if they fully understand them. But in the Open Enrollment Survey done by Aflac in 2012, only 16 percent of employees reported feeling confident they hadn’t made any mistakes during open enrollment, and almost a quarter felt they hadn’t picked the right coverage for their needs. Employees can get the wrong ideas about their benefits, and miscommunication, apathy or ignorance can perpetuate those misconceptions. The cost of ignorance is high: Employees may not have the coverage they need, and you may be paying for coverage they’re not using. This guide will help you understand four common misconceptions employees have about benefits offerings and what human resources leaders can do to educate them. How Much They Cost Experts say one of the …

CONTINUE READING

How to Decide Which Voluntary Benefits to Choose This Open Enrollment Season

If your company offers a multitude of voluntary benefits options, congratulations. These offerings are a valuable benefit that can make your life easier. Still, the open enrollment process and all the paperwork that comes with it can sometimes feel like a hassle. How do you decide which benefits are worth it? Here are a few tips to help you choose the voluntary benefits that will work best for you and your family this open enrollment season. Calculate Costs and Benefits Most voluntary benefits by themselves are relatively inexpensive and are less so when you purchase them through an employer rather than on the open market. That said, anything you pay for but don’t need is a waste of money. To help you determine which benefits are smart buys for your unique needs, Aoife Quinn, founder of Quinn HR Consulting Group, suggests a two-pronged approach: Look at the services you’ve needed …

CONTINUE READING

5 Things All Employees Need to Understand About Benefits

Keeping track of what your company’s employee benefits cover and how they can work for you can be a challenge, but it is vitally important. Your employer provides benefits as part of your compensation, and if you’re not taking advantage of them, you can miss out on some important savings and coverage. Here are five things all employees need to understand about their benefits. 1. Your Health Insurance Costs You need to understand what your health insurance costs are, including how much of the premium you pay each month, any co-pay and the annual deductible, says PJ Wallin, CPA and CFP at W Financial. “Employees should know what their benefit options are, as well as for their family and who pays the costs for each. Many employers may cover a larger portion of an individual, but then subsidize less of their family.” If your employer offers a choice of different …

CONTINUE READING