Understanding Your Benefits - part 2
In Part 1 we discussed your health benefits and what to look for, as well as what questions to ask. In Part 2 we will dive into your life insurance, disability, and 401(k).
Life insurance is exactly what it sounds like. It insures your life. When you die (God forbid), you choose who gets the insurance money (aka: beneficiaries). This money helps to pay for funeral costs and other expenses that may be incurred on or after your death. Many feel this is an unnecessary benefit, especially if you are still early in your career. Unfortunately, none of us know what the future holds, so it’s something you should consider. And hey! Your company may pay part of the premium, if not in full.
Again. Pretty straight forward here. Disability insurance covers you if you are injured or become ill (or disabled). There is short-term disability and long-term disability. The type of coverage just depends on the length of time you are out of work.
Disability insurance is typically an optional coverage, but it’s an absolute necessity in my opinion. It insures you still get paid when you can’t work. That’s kind of a big deal!
Lastly, the 401(k). This is a savings plan for retirement. You typically contribute via pre-tax payroll deduction and then pay taxes on it once you begun your retirement withdrawals. Some companies will sponsor the plan and even contribute to the plan up to a certain dollar amount or %. Whether you are just starting your career, or already halfway to retirement, it’s important to start saving. And if your company matches your contributions, it will only help you grow your savings faster. Ahem… free money!
In Part 3, we will cover paid time off (PTO) and FMLA (Family and Medical Leave Act). Stay tuned!