Rapid Changes in Employment Culture
*Updated July 3, 2021
More and more American homeowners are facing the hard facts of employment in the 21st century.
Gone are days of the assurance of a 30-year career with the same company, a healthy benefits package which included an insurance bundle typically paid for by the employer (or at least a good portion of the premium) which included health, short and long-term disability, and usually life insurance.
Today’s employers are seemingly doing whatever it takes to make sure that they can remain viable (which is understandable). Unfortunately, this includes either offering high-rate insurance programs (which the employee pays the majority of) or, alternatively, keeping a majority of their employees working under 35 hours per week. Thus, the employee remains a part-time employee, and the employer is not required to offer part-time employees’ insurance. This move has proven to save the employer untold amounts of money. Part-Time Classification
Additionally, many of today’s employee benefits are bare-bones minimal in what is offered. This typically looks like a medical insurance package of some sort that may or may not have some kind of short-term/long-term benefit rider included. Often, the employee is responsible for a high portion of the monthly premium.
More often than not, there is no disability insurance. And, Life Insurance has all but become a memory in the world of the employer.
Moreover, it is not uncommon in today’s workplace to move from job to job as a person advances in their career. This makes managing some long-term employee benefits somewhat challenging on the Human Resource side, as there is a higher employee turnover rate than there was 40 years ago. And, for the employee, it makes taking employer-sponsored insurance with you an almost impossibility (with the exception be health coverage through COBRA in certain circumstances).
With the rapid changes in the employment market as a whole, more and more people are venturing out on their own and working as freelance or contractor employees.
The job market has been making a general change from the employer/employee career-life relationship to more of a mobile, move as you grow or, your interests change.
This change has made some marked differences in how planning for retirement or future financial needs have been met (or are not being met in many circumstances).
This can lead to questions about how much money you should be saving, how much money you should be investing and where, and how much life insurance and what kind of life insurance you actually need.
The Average American Household is Not Prepared
According to CNBC.com, early in 2019, the average American household has just $8863 in their savings account. However, The Balance reports that the average American household is spending $5102 a month on expenses. These numbers translate into an alarming statistic that we cannot afford to ignore. The average American household has less than two (2) months’ worth of savings set aside should an emergency arise, and they need to fall back on their savings to stay in their home, feed and clothe their family and take care of their monthly debt.
A study released in September of 2017 stated that 54.3% of non-retired households reported not having any kind of long-term disability insurance. This means an estimated 54.3% of non-retired households have less than a two (2) month safety net if the primary income in the household loses their ability to bring home their income.
Additionally, more than one in four of today’s 20-somethings can expect to miss more than one year of work due to a disabling condition before they reach normal retirement age, according to the Social Security Administration.
Social Security Disability Is Not the Answer
The Social Security Administration also reports that the average Social Security Benefit payment for a disabled person is $1234 a month, totaling $12,140 annually. This is slightly higher than the poverty level for 2018.
This number is drastically lower than the average American household monthly spending of $5102 – $3,368 a month. And Social Security Disability is extremely difficult to qualify for.
There is a Life Insurance Policy That Is Right for You
There are riders you can add to Life Insurance that will cover you if you become disabled due to catastrophic injury or illness, some of which will pay until you reach the age or retirement, and some which will pay the full benefit of the Life Insurance Policy.
These types of policies are typically cost-effective and can help to keep you and/or your family in your family home and continuing to pay the bills while dealing with the changes or loss.
The experts at Hall Benefits will take the time to sit down with you, go over your current life circumstances, and help you figure out which plan makes the most sense for you and your family’s protection.
Working with a properly trained life insurance agent rather than a computer bot can help you avoid many expensive mistakes that policy owners have made.
Affordable and customizable life insurance policies that are written correctly can keep your family financially safe in the face of the unknown future.