Adding Value to Employee Benefits

August 6, 2014

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Employees who take advantage of the benefits package that their employees offer tend to be more devoted to their employers, display more job satisfaction, and are more conscientious about their work. The cost of health insurance may have increased for many workers due to the recent enactment of changes in health care through the Obama administration. Therefore, many employers are offering supplemental benefits to help offset the costs of out-of-pocket expenses for the employees.

One of the most popular supplemental benefit is the Accidental Death Indemnity policy or the Accidental Death and Dismemberment Benefit Rider. This benefit offers an additional amount equal to the face amount of the policy or the life insurance policy, if purchased as a rider. If death to the named insured ensues resulting from an accident on a common carrier, such as a train, bus, or airplane, the beneficiary on the policy would receive an additional amount as specified in the policy.

To derive the maximum benefit from the policy, anyone who travels quite frequently during the year on trips, whose work includes driving frequently to appointments, or who operates machinery or other vehicles during the course of their employment, should seriously consider purchasing this policy or adding a rider to their life insurance policy.

Another factor to consider in adding the rider or purchasing an accidental death indemnity policy, is the increase in accidents due to cell phone use. People who use cell phones while driving are four times more likely to have an accident. Teens and sales professionals have been using cell phones while driving in recent years, causing many fatal accidents. Because of the catastrophic losses sustained in legal battles with the victim’s families, some major corporations have undertaken a policy to prohibit their sales professionals from using cell phones while driving. Teens have been responsible for approximately twelve percent of all automobile accidents.

An employee could purchase the policy on himself/herself and add riders to cover a spouse and children. The additional amount of protection would be advantageous to the beneficiaries at the time of loss. As with all other life insurance policies, there are exclusions under the policy which would place limitations on whether the beneficiary could collect a benefit in certain types of accidents.

In conclusion, anyone who earns a living while driving a vehicle or who frequently travels by common carrier should consider purchasing an accidental death and dismemberment policy or adding the rider to their supplemental benefits policy or personal life insurance policy.

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Naming Beneficiaries on a Life Insurance Policy

March 7, 2014

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Perhaps one of the most sensitive issues in managing a life insurance policy is in choosing beneficiaries. If we have been responsible enough to buy life insurance, we must also be responsible enough to appoint the best person to collect the proceeds, use it wisely, and fulfill our wishes as to how the proceeds should be spent.

One of the benefits of life insurance proceeds is that they can be collected with having to be probated. The beneficiary simply notifies the life insurance company of the death of the policyholder, and the insurance company processes the claim. A check is then issued to the beneficiary within a few days to a few weeks, after the insurance company has determined that the beneficiary has a right of claim according to the terms of the insurance contract.

If the policy being considered is to pay the final expenses of a burial, a spouse should be named as the beneficiary, since, he or she will be the one to make the funeral arrangements. Usually one beneficiary is needed, but the policyholder can name a contingent beneficiary, if the beneficiary dies before the policyholder has a chance to name another, or if both the policyholder and the beneficiary were to die together in an accident. The policyholder can change the name of the beneficiaries as often as he/she feels necessary.

For larger policies which are being created to fund a trust or to give money to multiple members of the family, the policyholder can name more than one beneficiary along with the percentage of the proceeds to which each has been assigned. In this way, the proceeds can be collected without having to go to probate and the proceeds are tax free.

It is important to choose a beneficiary wisely as this is going to be the person who will carry out your wishes. If you decide to tell the person you have chosen to be a beneficiary, it would be wise to make it clear how the money will be spent. It is also wise to have a will which will detail your wishes for the settlement of your estate. Many people have disputed the settlement of estates and the decisions as outlined in a will.

If a policyholder does not have a next of kin or does not wish to name a beneficiary from the family, he/she can name his/her estate as the beneficiary. In this way, when the estate is settled, the probate judge will disperse the funds according to his own discretion. As it takes two or three years to settle an estate, or maybe longer, the family will have to wait for the probate judge to make a decision. This could interfere with the funeral arrangements if there exists no other insurance or proceeds to pay these expenses. This is why a life insurance is necessary for the payment of final expenses.

The probate laws for each state are different and it is important for all the involved parties to know how the laws are interpreted. If there are questions, a lawyer can help ensure that the family follows the laws of the state and the instructions outlined in the will.