You may not view it as an employee benefit, but discount insurance programs could be a valuable part of your overall benefits package. Employers and other large groups are often able to negotiate much lower rates simply because the risk is spread out over a larger pool than if you just purchased the policy as an individual. Examples of discounted insurance policies you may be able to realize through work include homeowners or renters, auto, umbrella and even pet insurance. Here a few things to consider about these perks:
1) Be aware that receiving the discount is most likely contingent upon your staying employed with the company. Check to see if policies are portable, meaning they can go with you when you leave, and factor that into your decision. Be aware that even if policies are portable, the discounts are often not. My husband and I recently signed up for group term life insurance through an association that I belong to but by doing so, we basically committed me to membership as long as we need the policy.
2) While most group insurance discount programs offer a lower rate than what’s available to the public, that may only apply to a certain company offering the insurance. Make sure you compare the discount available with what you’d get at competitive insurance companies to make sure you’re getting the best deal.
3) These programs sometimes only offer the higher-end policies so make sure you’re comparing apples to apples if you’re shopping around. I regularly use a rental car discount available to me through my membership in the AICPA, but since the discount only applies to midsize or better vehicles, it’s only necessary when I need to cart more than just myself and the hubs around. When I need the cheapest and smallest, I get a better deal through Travelocity or Expedia. Likewise, if you drive a beater, you may not need the level of insurance offered through the discount program, so make sure you’re not over-insuring yourself.
4) Sometimes receiving discounts through work is part of a larger package program that you have to enroll in during open enrollment. Make sure you factor in the cost of joining the program when deciding if it’s the best deal for you or not. Similar to the cost of joining Costco or Sam’s Club, if the cost to join eats up the savings you’ll realize by shopping there, it’s not worth it. We definitely factored in the cost of membership when applying for our life insurance.
5) I personally think that pet insurance can be a waste of money unless you have a big dog and live in an area where it has a higher chance of having some type of accident or injury. A better way to make sure your pet’s health is covered is to take the money you’d spend on premiums and establish a separate savings account solely for vet expenses. That way if you don’t actually need care, you still have the money. This is coming from one who spent more than $5,000 over the lifetimes of my beloved cats Hattie and Miles, and I wouldn’t go back and buy insurance for either of them since it wouldn’t have covered most of the stuff I needed for them anyway. Unless you can get a policy that covers annual check-ups, immunizations and preventative dental for less than it costs out-of-pocket (which may actually be likely through a work program), pass on the pet insurance, but do pay yourself the amount you’re saving so that you have the funds there when your pet needs help.
Health insurance and retirement savings plans aren’t your only benefits at work. You want to take advantage of all the perks available to you. Just make sure you’re only using the programs that truly save you money in the grand scheme of your life.
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