Employee Insurance Programs
Insurance programs are beneficial because they provide employees with various forms of rewards that are beyond their normal wages or salaries. Currently, every organization is obliged to put in place insurance programs, which protect their employees particularly in case of emergencies. Common insurance programs put in place by various organizations are health insurance plans, which have for a long time been fundamental in protecting employees in case of emergencies such as accidents or unexpected illnesses. It should be understood that there are different types of insurance plans or programs that are available in every organization’s compensations and benefits package. These include life insurance, universal whole life insurance, accidental death and dismemberment insurance, long and short term disability insurance, health and dental insurance, and employee assistance insurance.
Essentially, through the inclusion of insurance programs, employees together with their organizations stand a chance of attracting as well as keeping highly qualified and competitive workforces. Stiff competition is the norm in the modern world, and one of the key strategies of overcoming the same is the inclusion of insurance programs or plans that are comprehensively beneficial to the workforce. Moreover, one of the major challenges faced by organizations today is the significant reduction or dwindling of the number of new employees entering the workforce, and this has triggered the inception of several insurance programs and plans such as those mentioned above. Having traditional and limited approaches and programs has made it difficult for organizations to attract qualified employees, and this underscores the significance of insurance programs to modern-day organizations.
As seen above, one of the types of insurance programs available in an organization’s compensation and benefits package is life insurance. This type if insurance involves a contract between an insurer and an organization on behalf of its employee, where the insurer comes up with a promise that sees the payment of a given amount of money to the employee in exchange for a premium, and this is often incase of the death of the employee (Dearborn Financial Institute, 2000). At times, depending on the contract, the life insurance could see the compensation of an organization’s employee in case of a critical illness. Without a doubt, life insurance programs are advantageous to employers and employees in various ways. For employees, this program serves as a risk cover, particularly in the modern life that is full of uncertainties. With the program in place, organizational employees are sure that their family members can continue living enjoyable lives against unforeseen events or circumstances. Another advantage of life insurance programs is that it not only provides financial support to employees in case of death but also provides a platform for long-term investment. With this program, organizational employees can successfully accomplish or meet their goals such as educating their children or establishing their homes.
Considered one of the types of insurance programs available in compensations and benefits packages of organizations, universal whole life insurance covers the insured’s entire life. Like the life insurance, universal whole life insurance involves a contract between an insurer and an organization on behalf of its employees. The major difference is that for the universal whole life insurance, there is a guarantee that the coverage and premiums will remain in force for the employee’s entire lifetime. This is only if the organization pays the required premiums. It should also be understood that the premiums for this type of insurance are fixed, and this is on the basis of the age of issue. Unlike other life insurance plans, this plan’s premiums do not increase with age. The organization is obliged to pay the employee’s premiums until the time of death. The advantage of universal whole life insurance programs for employees is that they cover the employee’s life as well as those of family members until the time of death. Also, this program is flexible, and thus, the employee can increase or decrease the death benefits provided so that they match the life circumstances. The program also enables employees to save funds, which in turn earn significant amounts of interest. For employers, the program helps in the reduction of costs incurred while attending to the needs and demands of employees (Dearborn Financial Institute, 2000).
As mentioned above, accidental death and dismemberment insurance (AD & D) is also available in organization’s compensations and benefits packages. In this case, an employee is compensated, as per the contract between an organization and an insurer if the cause of an employee’s death is an accident. Moreover, this program states that an employee should be compensated in case he or she becomes physically challenged because of an accident. AD & D is advantageous in various ways. First, owing to the fact that accidental deaths and related losses occur rarely, its costs are less, and thus, both the employees and the organizations spend less in form of premiums. Another advantage is that AD & D is valuable particularly for employees with jobs that are largely dependent on physical capabilities (Beam & MacFadden, 2001).
Organizations also focus on the provision of long term and short term disability insurance programs, which ensure that some of the income of an employee is compensated in case of an injury, sickness, or disability that prevents him or her from carrying out normal duties in an organization. Notably, short-term disability insurance sees the compensation of an employee only for a short period after an injury or illness. On the other hand, long-term disability insurance sees the compensation of an employee for several years, as stated in the contract, after suffering an injury or a critical illness. The advantage of this program is that it eases the financial burden on an employee in case of an injury or a critical illness (Steuer & Steuer, 2012).
Beam, B. T., & MacFadden, J. J. (2001). Employee benefits. Chicago, Ill: Real Estate Education Co.
Dearborn Financial Institute. (2000). Universal life insurance. Chicago: Dearborn Financial Institute.
Steuer, A., & Steuer, A. (2012). The questions and answers on disability insurance workbook: A step-by-step guide to simple answers for your complex questions. Austin, TX: Life Insurance Sage Press