The Key Element Missing…

The Key Element Missing in Many Employee Benefit Packages

Businesses typically offer employees four key benefits: health insurance, disability insurance, life insurance, and qualified plans. Each has its niche – and each is designed to address one particular need.

Health Insurance – pays medically-necessary expenses, and is typically replaced by Medicare during retirement years.  

Disability Insurance – replaces earned income lost due to injury or illness.

Life Insurance – pays a death benefit.  Most employers offer term life insurance, which becomes progressively more expensive over time, and is typically not kept in force after retirement.

Qualified Plans – such as 401Ks — are tax-advantaged retirement investment or savings vehicles.

What none of these four benefits cover is the cost of long term care – an expense predictably incurred by many, especially in old age.

Health insurance is exceedingly important for its capacity to safeguard employees against devastating health expenses, and the expenses caused by an employee’s inability to work due to catastrophic injury or illness.  However, health insurance does not cover custodial long term care, which accounts for the vast majority of long term care.  Custodial care is also not covered by Medicare, Medicare supplements, or Medicare Advantage.

Disability insurance is similarly critical – if an employee is sick or hurt and unable to work.  However, this important insurance does not provide extra funds or coverage if professional long term care is needed.

Life insurance can literally replace a lifetime of earnings to sustain the surviving family of an employee who dies before his or her time.  However, most life insurance policies offered at the worksite do not include additional riders to any type of long term care coverage.

And, while having a qualified plan makes it much easier for employees to fund their retirement, many retirees will not have accumulated enough to underwrite their retirement, maintain their inheritance plans — and also fund their long term care.

Isn’t it time that every employer considers offering his or her employees (and him/herself) the important fifth key benefit – long term care insurance?