Insurance is not the most interesting topic to discuss. It’s important to think about. If you don’t buy insurance, the consequences can be life-changing. Insurance can help reduce financial burdens associated with maintaining health, well-being, and mitigating the costs of accidents, liabilities, and death.

Below are seven types of insurance that small businesses can offer to individuals and families who come to them with insurance needs.

If this is you, consider reaching out to our expert a employee benefits consulting team. Consider contacting our employee benefit consulting team if this is you.

1. Health Insurance

Insurance can reduce the cost of accidents, illnesses, and injuries. Medical expenses from a chronic illness or a catastrophe can be so high that many declare bankruptcy. Many people find it difficult to pay for even standard medical expenses and doctor visits. Over 60% of adults say that medical costs are a major source of stress for them.

Private insurance can be expensive, but there are affordable plans and tax breaks available through the federal and state marketplaces. federal marketplaces offer affordable plans as well as tax breaks for those who qualify. Dental and vision insurance fall under health insurance even though medical insurance is the most popular.

Medical insurance comes in many forms. There are three main types of medical insurance: preferred provider organization plans (PPO), health maintenance organization plans (HMOs) and high-deductible health plans.

Health Maintenance Organization Plans (HMOs)

HMOs are copay plans where participants must select a primary physician. HMOs require a deductible to be met prior to coinsurance taking effect. They also have an out-of pocket maximum. HMOs cover only expenses related to providers in the network.

Flexible spending accounts are offered in conjunction with traditional copay plans. FSAs are tax-advantaged plans that can be used for medical expenses. IRS limits the annual contributions.

Preferred Provider Organization Plans

PPO plans have co-pays and are similar to HMOs. They will cover expenses for out-of network providers, while an HMO won’t. The in-network provider costs are covered more than the out-of network expenses.

High Deductible Healthcare Plans (HDHPs).

As the name suggests, HDHP insurance has a high deductible. A deductible of $1350 for an individual or $2700 for a whole family is required to qualify for HDHP status. The HDHP requires employees to pay the deductible before they can participate in the co-sharing plan. As with PPOs and HMOs, lab tests, office visits and prescriptions were covered. Some HDHP plans will only cover in-network expenses, while others will not.

HDHPs often come with a Health Spending Account (HSA) to help offset the upfront cost of high deductibles. The HSA is a tax-advantaged account that can be used to pay for qualified medical expenses. It works similarly to an FSA. HSAs are different from FSAs in that employers can contribute to the plan. There is also no “lose it or you lose it” clause. The money deposited into an HSA is kept by the employee, even if the employee leaves the company.

Dental and Vision Insurance

Dental and vision coverage is much cheaper than medical insurance. Dental insurance covers a minimum of two annual checkups, cleanings, x-rays, and other services like crowns and fillings. Vision insurance typically covers annual eye exams and a portion of prescriptions for glasses or contacts.

Dental and vision insurance are often subject to a deductible. In-network doctors and hospitals will be covered more than those who do not belong to the network.

2. Disability Insurance

There are two main types of disability insurance–short-term disability and long-term disability. Short-term disability coverage can last from three to six month, depending on plan design. It pays 60% of an employee’s salary.

When disability insurance is provided by a company offering both, long-term disability will kick in after the short-term disability. Long-term disability begins after a certain period of time following the onset of an illness or injury. Long-term disability can pay an individual up to ten years, and even longer depending on the plan.

Disability insurance has many nuances, just like other types of insurance. Some insurances, for example, pay out if a person is disabled and cannot perform their regular occupation. Some insurances may not pay unless you are unable to work.

3. Life Insurance

Life insurance comes in many different forms. The most basic and least expensive plan is term life insurance. Term life insurance is paid out if a plan participant passes away within the specified time period. If, for example, someone bought a $250,000 term policy that would last 15 years and died within those 15 years, then the policy would pay $250,000 to the heirs tax-free. As long as you continue to pay your premiums, permanent life insurance can be paid out at any time. For life insurance, it’s standard to have to pass a physical exam or answer medically-related questions.

Consideration should be given to the individual’s circumstances when purchasing life insurance. For instance, parents with minor children may need to purchase a higher coverage level in order to cover the costs of raising their children if they were to die.

Most employers provide a certain amount of free life insurance to their employees. The employees can purchase additional coverage at a low price. In most cases, however, the insurance covers only the employee during their employment with the organization.

4. Long-Term Care Insurance

Insurance for long-term care can provide peace of mind to individuals who need short- or long-term nursing. If you don’t own assets to cover nursing care, a high level of insurance coverage may be needed.

It can be expensive to purchase this type of insurance. It is usually cheaper to purchase long-term care through your employer, even though many don’t provide it. You can get hybrid policies at a cheaper price, such as those that let you share a policy with your spouse.

5. Automobile Insurance

Everyone who owns a vehicle or has owned one in the past knows that auto insurance is required. This is also the most important insurance policy you can get. In 2020, the National Safety Council reported that over 42,000 people died in motor vehicle crashes. In 2019, 4.44 million people had accidents that were severe enough to warrant medical attention. Even minor accidents, such as fender benders, can cost hundreds or thousands of dollars to repair.

When the insured participant has a car accident, the coverage pays for both their own damages as well as the damages of the other party if it is determined that the participant was at fault. It will pay for hail damage, rocking a car’s window and other types. Depending on the state where you live, certain levels of car insurance are required. Lenders also require that an individual has insurance coverage at least equal to the amount of the loan.

6. Homeowners Insurance and Renters’ Insurance

A house is not an insignificant or small purchase. It’s probably the biggest purchase that a person makes. It’s important to protect your home, not only to avoid losing the money you have invested, but to also be able to rebuild if the worst happens. Homeowners’ insurance covers partial or total destruction of a house. The cost of the home, its damaged or lost contents, and any money required to rent another house while the covered one is being repaired or rebuilt are all covered. There are three levels of coverage for homeowners: actual cash value (ACV), extended replacement value or value (ERV) and replacement cost.

You should always read the fine print of your homeowners policy. In the event that the house is located in a flood-prone area, an additional policy will be required to cover the loss and damages caused by flooding. The standard homeowners policy does not cover damage from earthquakes, termites, or neglect. It also doesn’t cover valuables like jewelry and artwork.

Renters need to be insured. Renters cannot be held responsible or liable for structural or other property damage. They still want to cover the contents of the house in case of theft, damage from flooding, fire or any other reason. Ideal coverage should be equal to the cost of replacing all belongings.

7. Liability Insurance

Homeowner’s insurance often includes liability insurance, or it can be purchased separately. Liability insurance will cover any accidents that others may have in the home of the plan participant. If a guest falls and trips in the house, for example, the homeowner may be held liable, and responsible for paying the medical bills of the guest. These costs can be covered by liability insurance. Some plans cover you outside the home.

KBI Can Help you Navigate Your Insurance Needs

Insurance is important for peace of mind and financial security. KBI’s brokers have a wealth of knowledge in insurance. They can provide services for individuals, small businesses, large corporations, and even families.

Our team has decades of experience and can guide you through the many nuances in insurance, determining the best plan and price to meet the needs and budgets of your clients. We will then help you secure the right plans for your company. For more information, contact us today.

By Solomon

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