Voluntary benefits is a term applied to a wide range of supplemental, yet critical, products that offer protection in the face of a host of situations where standard insurance would not apply. These benefit products can be purchased by employees and paid for through payroll deductions, and actually help insurers reduce risk so lower rates can be made available on primary insurance products, as well. There are many different voluntary benefits available, as well, ranging from disability insurance to cancer-specific coverage, and everything in between. Each offers protection and peace of mind.
What Are Voluntary Benefits?
Traditionally, voluntary benefits have included things like supplemental life insurance, disability insurance, and other options. However, with the increasing costs of primary health insurance, voluntary benefits can be extended to health care, as well as disability or death protection. One reason for the increasing focus on voluntary benefits is the ongoing effort to reform health care. With a greater focus on providing health care coverage (or securing it, in the case of an employee), voluntary benefits can help to meet individual needs and requirements, particularly in the case of high-deductible insurance policies that have become so common today. Voluntary benefits are able to fill in the gaps between other types of insurance coverage, providing solutions for those with specific diseases. Cancer is a good example of this, but there are numerous others. In addition to filling in the gaps, some voluntary benefits can also be used to help cover out-of-pocket costs for medical care. Employees can purchase voluntary benefits on their own through standard payroll deductions, allowing them to pay for the coverage they require from pre-tax payroll dollars, essentially saving money while still obtaining the protection they require. There is also the fact that voluntary benefits help insurers spread risk, thereby reducing the rates at which they can offer other types of insurance.
Types of Voluntary Benefits
You’ll find a range of different voluntary benefits that provide coverage in different situations. We’ll discuss some of the most important below. Accident-related benefits help insure you against an accident outside of the workplace. Cancer-specific protection helps to ease financial stress while ensuring treatment availability. Critical illness coverage offers financial protection in the face of disease, while dental protection helps offset the cost of routine and emergency dental care. Disability insurance is another vital consideration, particularly for injuries or illnesses that prevent you from being able to work either in the short-term, or the long-term (short-term disability or long-term disability insurance).
How Voluntary Benefits Help Employers and Employees
Voluntary benefits provide the means for both employers and employees to ensure coverage is available, but to avoid “breaking the bank” at the same time. Employers want to provide coverage, and employees need that protection – voluntary benefits provide choices in insurance, but do not affect a company’s profitability.