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What are Ancillary Benefits and Why Are They Important? Group Life Insurance. - YouTube
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the last of the ancillary benefits
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I wanted to make a separate video for
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dental and vision are lumped together,
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but life insurance is,
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In my humble opinion.
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And, a lot of my colleagues opinions
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much more important in the grand scheme
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of things.
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most people want life insurance.
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It's not necessarily a sexy thing to
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buy, but they do want it,
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and offering it through the company.
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Is a nice gesture,
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and also very reasonable to do so I'd
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say even more reasonable.
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then oftentimes,
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dental and vision coverage.
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there's three types of life insurance.
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Okay, there's term,
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there's whole,
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and there is universal.
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So the first term,
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that one is the least expensive,
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at least for younger folks.
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Typically the least expensive.
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you can get a lot of it for
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a low price.
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Usually best to get it when you're younger.
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But downside is no cash value accumulation with
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it, but you can get a decent amount
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of life insurance for cheap,
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especially the younger.
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You are.
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whole life insurance,
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meaning whole life.
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It's permanent life insurance,
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so you can set it up individually to
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where you only pay into it for 20 years
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or so. But,
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if you're talking from a group perspective,
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whole life is also a great option.
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essentially a
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portion of the money that is put into
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the plan goes towards the insurance.
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Then another portion goes towards the
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cash value of the plan that has a
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guaranteed interest rate in most cases.
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sometimes it can fluctuate a
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little bit.
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But you see,
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somewhere between,
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like, a 2 to 5% interest rate I've seen,
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I've seen ones as high as six.
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The premiums for that plan are
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the same throughout the individual's whole
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life.
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they can borrow against it
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and take money out and take a loan.
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Basically,
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the third option is universal life
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insurance,
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which is a little bit tricky to understand.
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But still,
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it kind of it kind of takes both
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best of both worlds with universal and
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whole, where whole life insurance policy,
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you're gonna see a higher premium than
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a term now for any amount of coverage.
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But with a universal life and some some
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life insurance companies are are,
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you know,
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more secure than others where universal?
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You know,
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sometimes it might be in the contract where
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you may have your premiums raised for
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whatever reason,
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and it's not up to you or there's no
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guarantee.
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But, I haven't seen that personally,
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but that is a big worry for people in
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my industry offering universal life.
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But I have never personally seen it.
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with any of my clients,
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but nonetheless universal life insurance.
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It is like whole in the sense of it
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has cash value,
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but it's similar to term in the sense
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of the premiums are typically less .
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What you can do with a universal life
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is contribute,
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an amount to the insurance portions,
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just like you would with whole,
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and then you usually will have a higher
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window of what you can contribute.
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To. The cash value side,
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and as you get older,
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your cost of insurance may go up,
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so the amount you contribute may also
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need to continue to go up to continue to
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get those gainss.
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But that is the difference between a
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whole and universal.
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You can typically contribute more to
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the plan and the premiums are less. in the beginning
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They may get more expensive over time
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and they can fluctuate.
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So whole is better for folks who want
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something more secure.
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Guaranteed.
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Universal has a chance to lock in more
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gains, um,
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and other things to consider.
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So one Rider on a particular program that
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I've deployed in multiple accounts,
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in groups was a universal life insurance
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program that also had a critical illness.
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Slash
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accelerated benefits rider,
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meaning the policy was kind of used
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as long term care insurance.
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It wasn't exactly long term care insurance,
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but, the face amount was $100,000
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for example.
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And the if the policyholder ever got
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diagnosed with needing long term care,
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what would happen was that that $100,000
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would actually double to $200,000 in
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benefits,
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and the individual could take,
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4% off the policy a month.
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So $4000 a month of that 100,000.
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And if they depleted it,
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it would go back up to 100,000.
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and then if they passed away within
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that time,
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then whatever is left on the plan,
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they would be able to pass on to the
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beneficiaries so they could get something
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out of their plans.
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So it had cash value but also have the
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ability to be converted into a policy that
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would pay the person that cash value or
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the yeah,
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the cash value amount of the life insurance
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policy per month for a certain amount of
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time until the value ran out.
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The second thing to consider with group
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life insurance is if you can get guaranteed
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issue. Another big thing with these programs
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that I brought in was that they were
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guaranteed issue.
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So I've written a lot of life insurance on
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the individual side for business owners
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and for just,
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you know,
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average everyday Americans alike.
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And in that process,
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there may be some extensive underwriting.
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There may be a financial underwriting.
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Have you had any bankruptcies?
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Have you had credit card debt?
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All this stuff health,
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any type of health condition can not
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necessarily deny you coverage,
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but it can jack your rates way up.
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a lot of folks are living with
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things like diabetes, and
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other chronic conditions that are,
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fairly normal to have.
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unfortunately,
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as we get older,
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So, having guaranteed issue inside
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the company can sometimes be the only
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chance an employee has to get decent coverage.
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I've worked with folks that are in
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their sixties past that didn't have
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live insurance
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and they didn't take it with them or
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whatever the case may be.
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And and, you know,
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we struggled to just get them a $10,000 policy
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that they could hardly afford,
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you know,
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because of their health.
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that brings me to my last point
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of portability.
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Other thing to consider.
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Can the plans be portable?
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So if an employee signs up for the program,
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with your company,
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can they take it with them when they
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retire? Something to highly consider,
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a lot of folks retire and
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they don't have life insurance because
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they kept it with their employer and
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then it's gone.
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It's gone.
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So portability is another big thing to
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take into consideration,
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but nonetheless,
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overall life insurance in general plays
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a very important part in everyone's lives
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because we all will die,
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obviously,
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and we all know that it's not fun
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to talk about
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but at the end of the day,
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what it does is it provides a tax free
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lump sum of money to a beneficiary or
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beneficiaries in order for them to
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do a multitude of things,
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depending on the amount,
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right? Like cover funeral costs.
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Uh, like final expenses also cover.
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If it was a sudden death and was it
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wasn't necessarily as planned for as
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well, um,
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something like mortgage payments,
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car payments,
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other bills that aren't getting paid
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now because of the death of that individual,
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um, taxation on a business or taxation on,
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um 41 K plan or an investment account that
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the IRS is taking back on the life insurance
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provides this big lump sum of cash that's
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tax free that,
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um, it's really unique to any other type
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of thing that can be given,
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um, at the end of someone's life.
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So being said in my opinion,
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and I think a lot of brokers opinion between
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dental vision and life insurance.
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The most important of the ancillary is
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life insurance.
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Um, and other things to consider.
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Is it going to be term,
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whole or universal?
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Will it have any writers like long term
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care Will it be guaranteed issue?
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And can employees take it with them?
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Those are all things to consider.
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Yeah, Mhm.
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