Federal Employee Benefits – The Life Insurance Coverage

September 23, 2015

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If you are a federal employee, it is important to understand your benefits package to ensure that your income is adequately protected in the event that something should happen to you.

The U.S. government does a very good job of compensating those who work for the federal government. However, as with other employee benefit plans at some of the private sector businesses, the benefits available to employees do not adequately cover the family in time of need. That is why it is important to review the benefits packages and determine if there is a need for more coverage.

For instance, closely examining the FEGLI (Federal Employees Guaranteed Life Insurance) program, there are four major areas where the benefits are deficient.

1. The FEGLI program is a term insurance program only. There is no cash value available to the employee to borrow against for emergency needs. Term insurance is pure insurance in which a death benefit is available to the family in the event of death to the breadwinner. There is no cash value which accumulates in the policy.

2. Under the FEGLI program, the life insurance only covers the employee and his family only during the time that the employee is employed for the federal government or the face amount will reduce tremendously upon retirement.

Term insurance covers the family in the event of death of the breadwinner, but only during a specified period of time. Generally, the policy will cover the family for 10, 15, 20, 25, or 30 years, depending on which insurance company the family elects to sell them a life insurance policy. An insurance agent will recommend term insurance to cover short term needs, such as a mortgage which will be paid over a 30 year period.

3. Federal employees will find that their premiums for their life insurance will increase with age and salary increases, but the coverage decreases. This is called increasing premium term insurance, which becomes very expensive in later years, when there is more of a need for life insurance.

4. In the event that the employee becomes disabled, he/she may not be able to continue paying for life insurance, since the employee is not collecting wages.

I cam across this comment on a blog paost which illustrates why federal employees need a periodic review of their policies:

“My mother worked for the Federal government for over 30 years and had the FEGLI plan and passed away and my sister and I will be splitting a little over 5,000 dollars. When my father (mom was divorced) passed his insurance was with the state and my brother and I split over 50,000 dollars. What’s wrong with this picture?? Our government is so screwed up and you know that all those senators, etc. won’t have that cheap of insurance and we are paying for it. My mom worked hard those 30 years and sure didn’t get all the perks and paid vacations.” madashe*l, from Life Insurance: “The Good, the Bad, and the Ugly.”

These are problems which the employee must resolve in order for the family to be financially protected in the event of his/her death. Boston Mutual offers solutions to these problems with products which are specifically designed to meet the needs of federal state, municipal, and postal workers. For a free booklet explaining your options, please use the contact form to request the FREE brochure,

    Legacy Life Select: Permanent Life Insurance for Federal, State, Municipal, and Postal Workers.

Please copy and paste the title into the contact form.

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Employee Assistance Programs Can Help Boost Profits

January 25, 2015

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As we transition from an Industrial Age to a Digital Age, families are experiencing more stresses due to the changes in skill sets. Some are prepared for the changes and will embrace them, while others are not prepared for the changes and will not willingly make them. Some are reluctant to pursue an education to prepare themselves for new responsibilities.

Unfortunately, these changes are causing stress within the families and among workers in the workplace. Many workers lost jobs as companies made changes in their goals and plans for the future, resulting in restructuring of the job force. Losing these jobs intensified the stresses within the families, causing marriages to fall apart and put added pressure on the working spouse to support the family on one salary instead of two.

Because we are individuals, we have different ways of coping with these changes. Some employees resort to alcohol or drugs to cope with the changes or may develop mental illnesses. As a result, some employees may need help in adapting to these changes and others may not. Because the employees who are struggling with change do not ask for help, the employer or business owner has to be observant of and attentive to the indicators of stress within the workers. It is estimated the seventy-six percent of substance abusers are working. Additionally, there should be a plan in place to address these issues.

In the past, health insurance companies introduced Employee Assistance Programs to the companies to help employees adjust to changes. However, thirty-eight percent of employers chose to make these plans available only to their executives up until a few years ago. In recent years, however, Employee Assistance Programs are becoming very popular, as seventy-four percent of employers are making these programs available to all workers who are in need of the services.

Employers have found that it would cost them anywhere from twenty-five percent to as much as two hundred percent of the employees’ salary to replace him/her, because of problems with substance abuse or mental illness. These losses total $197 billion per year nationwide. The employees have a tendency to be tardy, take excessive days off, suffer industrial accidents, experience limited production, conflicts with co-workers, and high turnover. These employees were very valuable to the company because of their knowledge and skill pertaining to their jobs.

Workers between the ages of eighteen and twenty-five are more apt to struggle with mental illness as well as substance abuse, and experience high turnover, while Baby Boomers who need to remain in the job force during retirement age, will have problems with masking their pain with alcohol. This may exacerbate any other underlying health problems such as heart disease, diabetes, and high blood pressure, increasing health care costs.

Once the employees are able to enroll in the programs, the employers see results which save them time and money in recruiting new employees to replace the troubled employees. The Employee Assistance Programs consist of wellness programs which encourage the employees to make lifestyle changes. The employees also need adequate medical coverage to cover the costs of doctors’ visits and counselling. Available through health insurance programs and voluntary insurance programs from life and health insurance carriers, these programs are gaining in popularity as a way for employers to address employee substance abuse and mental illness issues on the job.

In conclusion, companies which incorporate Employee Assistance Programs into their benefits packages will retain their valuable employees rather than spend time and money in recruiting new employees.

Gail Cavanaugh is an Independent Life and Health Insurance Agent representing Colonial Life.