Family Security and Employee Benefits

The choices you make in your employer-sponsored group benefits can be much more important than many realize. Having too little life and disability income insurance might have severe, lasting effects on your family if something were to happen to you or your spouse.
 
In a recent survey of 1,000 Americans conducted by Ipsos Public Affairs, 67 percent of survey respondents said that their death or the death of their spouse would be a much greater threat to their family’s future financial situation than falling home prices, an economic recession or rising interest rates. 
 
The difference in one group life or group disability income option versus another could add up to hundreds of thousands of dollars in financial stress should you have to rely on the insurance. One reason people often select employer-sponsored life insurance coverage with only a few seconds of thought is that it’s seemingly such an easy decision. Many companies provide the equivalent of one times salary automatically, then let the employee add three or four times their salary in additional coverage for a competitive monthly cost. So adding one times salary to their coverage seems like plenty to cover things, but rarely is this the case. 
 
“Premature death and prolonged disability always seem to happen to someone else, not to us, so it’s natural for people to underestimate the importance of having solid coverage,” said Ivan Gilreath, president of ING Employee Benefits. “Yet, every day, people suffer these losses and the degree of resulting stress often comes down to several dollars in monthly premium deducted from your paycheck—based on a hasty decision you made months before during benefits enrollment.”  
 
Gilreath points out that U.S. Department of Labor rules stipulate that most employees are allowed to change group benefit options once each year, generally coinciding with the calendar year. The autumn months are sometimes known as benefits enrollment season, as employers work to finalize plan participation before the beginning of each year, according to Gilreath. ING Employee Benefits’ insurers, ReliaStar Life Insurance Company and ReliaStar Life Insurance Company of New York, currently provide group life insurance coverage for about 4.4 million Americans through various employers and affiliate groups.
 
How Much Insurance Do You Need?

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Here are a few factors to consider as you determine how much coverage you may need while looking ahead to your employer’s annual benefits enrollment process.
 
• Your home. Maybe your family wouldn’t want to pay off the mortgage if you were to die. But, at the very least, you may want to consider leaving an amount that might serve to pay down the mortgage amount enough to lower monthly payments.
 
• New debt. Have you taken out a home equity loan in the past year or so? Or increased balances on your credit cards? These numbers may not seem like much, but stretched out over many years, they alone may prompt the decision to add another “one times salary” to your group life coverage.
 
• Future costs. Do your kids aspire to be scientists, artists or CEOs? While you may not be able to fund everyone’s college plans through a group life policy, it makes sense to factor these important goals into your life insurance equation. Don’t look at projections of college tuition increases and just throw up your hands. Any money, saved carefully, can help down the road.
 
Decisions On Group Insurance Benefits
 
Once you’ve made your selections, make sure to clearly communicate them to your spouse and share any supplemental materials the insurer might provide. For example, some companies provide a comprehensive package of support services to beneficiaries. These might include special withdrawal accounts for your beneficiaries to help them access their death benefit dollars, toll-free bereavement hotlines to get help with questions and concerns, and booklets and other resources to help them deal with legal and financial issues. 
 
Spend a little time choosing your insurance coverage so you’ll be preparing your family well for an uncertain future. Visit http://www.ing-usa.com for more information.