This column will help you answer these two questions:
- Do you want employees who want to work?
- Why protect your income?
Review Your Benefits Program to Maximize Your Employees’ Choices
Employees have a lot of choices in where to work and how to work. So, how do you recruit and retain employees who want to work for you? One way is to offer a comprehensive employee benefits program that gets employees engaged.
Add benefits, not costs: If you’re worried that adding more benefits will mean adding more dollars to your budget, take a closer look at voluntary (employee-paid) benefits. They supplement employer-provided benefits, giving employees the option to buy additional coverage. Because these benefits are available through the workplace, employees can often get better rates than what they could find on their own.
Adding more coverage can make a big impact. Take group long-term disability, for example. This coverage is a great start to help employees prepare for an unexpected illness or injury, but it’s often not enough when you consider taxes and benefit caps. When employees add voluntary individual disability insurance, they protect a greater portion of their income. If they become too sick or hurt to work, they can more readily handle everyday living expenses.
Bottom line: Let’s face it—the price to replace key talent can be costly. By enhancing your benefits program, you add value for your employees. It’s a way to attract new talent and get current employees more engaged and less likely to leave. And it won’t dramatically increase your costs, which means your budget stays the same—a win for you and your employees.
Review Your Insurance Coverage to Protect Your Income
You know that you are working hard to prepare for the future, but how would your life change if you suddenly became too sick or hurt to work and your paycheck went away?
Take a minute to think about all the things your income provides. Your list might include supporting your family, saving for a college education and preparing for retirement. Those important financial goals won’t just go away if you can’t work because of an illness or injury.
And although you may not want to think about becoming sick or hurt, it happens more often than you think. That’s why insuring your income could be one of the most important things you do. When it comes down to it, your ability to work and earn an income is the asset you rely on the most.
Your lifetime income: Consider how your lifetime earnings compare with other things you’re probably protecting with insurance, like your car and home. Your lifetime income is worth so much more, yet it often goes unprotected.
That’s why many people consider individual disability insurance. It works differently from homeowners’ insurance, but the concept is similar. If you can’t work and earn an income, it pays a monthly benefit directly to you, much like a paycheck. That helps you pay everyday expenses—big and small.
If you’ve already got employer-provided benefits such as group long-term disability insurance, that’s a great start. But is it enough? In general, group long-term disability insurance benefits will cover about 60 percent of your gross income or as little as 40 percent after taxes. That will help in the event that you need it, but it may not be enough for you to keep up your lifestyle and financial goals.
Having a separate individual disability insurance policy is a great way to fill potential gaps in protecting your income. Because it’s so important, it’s one of the most common components of a strong financial plan. Experts agree: That small investment today helps ensure that you and your family are taken care of if the unexpected happens.
Learn more about your potential income protection gaps at principal.com/dicalc.
Cassandra Audus is a financial representative with Principal National Life Insurance Co. and Principal Life Insurance Co., members of the Principal Financial Group®, Des Moines, IA. Contact Cassandra at (954)654-1316 or firstname.lastname@example.org.
Insurance products from the Principal Financial Group® are issued by Principal National Life Insurance Company (except in New York), Principal Life Insurance Company, and the companies available through the Preferred Product Network, Inc. Securities and advisory products offered through Principal Securities, Inc., (800) 247-1737, member SIPC Principal National, Principal Life, the Preferred Product Network and Principal Securities are members of the Principal Financial Group, Des Moines, IA 50392. 681438-112018.