Life insurance offers members peace of mind

No one likes to think about life insurance, but recognizing the need for it is a task that responsible business-people acknowledge as a necessary part of life. Moreover, it can provide peace of mind in uncertain times.

Financial planners agree that most working Americans need some level of life insurance to assure that their family will remain financially secure in the event of the untimely death of a major income provider.

Group life insurance is a benefit employers can provide at a relatively affordable rate. Michigan Retailers Association recently improved its group life insurance offerings by contracting with a new provider, Unimerica.

In conjunction with this change, MRA President and Chief Operating Officer James Hallan urges members to think about the life insurance benefits available to themselves and their employees.

“Many businesspeople spend hours working on a plan to market their products, but they may spend little time planning for the untimely death of an owner or key employee,” said Hallan.

“Michigan Retailers believes that life insurance should be viewed as an extension of a thoughtful business plan. We urge everyone to plan for contingencies and take the time to check out the MRA group life program.”

As part of the new plan—available now to all MRA members whether or not they use Blue Cross Blue Shield health insurance—members can take advantage of new benefit levels.

The new plan offers benefit levels of $10,000, $25,000 and $50,000. These levels are higher than those of MRA’s former plan and are more in keeping with today’s financial needs.

Members who use the new group life insurance plan will choose from one of the benefit levels offered, and all employees under the plan will have that level of basic coverage. In addition, each covered employee has the option to buy supplemental insurance to bring coverage up to a level the employee decides is sufficient.

Joe Gromala, an independent consultant on employee benefits, works with MRA on issues of insurance plans. Gromala advises that some of the financial needs that life insurance helps to meet include:
• Final expenses: uncovered medical expenses, funeral expenses, estate and probate expenses;
• College expenses for school age children;
• Mortgage expense;
• Replacement of the deceased’s annual salary—varies depending on the earning capabilities of the surviving spouse;
• Funds for the eventual retirement of the deceased’s spouse;
• Business succession—expenses associated with continuing a business owned by the deceased or transferring ownership to partners. (For more information, see “Ask Michigan Retailers” on page 12.)

It can be a challenge to determine how much life insurance you need. Many variables—age, marital status, number of children and their age, spouse’s income or ability to work—make the task seem complex. Fortunately, insurance experts have developed tools and strategies for including all important variables in the determination.

A popular approach to determining your insurance needs is to use a worksheet or online insurance calculator.

These tools prompt you to consider many expenses you might not have thought of, such as future college expenses for children or retraining expenses for the surviving spouse. By asking specific questions about your assets, debts, children and spouse, the worksheets or calculators can provide an estimate of needs that is tailored to the individual.

While life insurance proceeds are invaluable to loved ones, the reality is that a short-term disability is more likely to occur. Short-term disability insurance—which pays 60 percent of the lost salary for six months (26 weeks), up to the maximum benefit level chosen—is another option that MRA members should consider offering to their employees.

In considering your or your employees’ needs for short-term disability insurance, Gromala advises: “ask yourself how many of your employees (including yourself) can get by without this income coming into the household for six months.”

The plan offered by MRA fills the most immediate disability need, because many employees recover by the end of the six-month benefit period, and some of those who are still disabled can qualify for Social Security disability benefits.

For general information about MRA’s life insurance plans, contact your account representative. MRA’s insurance specialist, Linda Cook, can help with more complex questions about life or disability insurance—contact her at 800.366.3699 or lcook@retailers.com.

Life and disability insurance might seem like unnecessary “extras” when the budget is tight. But, in fact, it is precisely in hard economic times that insurance can be most valuable, when savings are low, debt is high and large medical bills can pile up quickly. You have enough other things challenging your peace of mind—being without life insurance doesn’t have to be one of them.