Family Indemnity PLan

Family Indemnity PLan

A BOOST FOR EMPLOYEE BENEFITS  

New Products help Employees Prepare for the Unexpected 

A reality for which every good employer must prepare is helping employees cope with the loss of their own family members.  

In addition to dealing with the emotional toll of loss, employees are often unaware and unprepared for the financial implications of a sudden death.  The employee or his family may discover that, even if they do have the finances to cover the funeral expenses, they are unable to access the funds they need immediately if bank or credit union accounts are solely in the name of the deceased. Or, having utilized the funds in these accounts for funeral expenses, the employee or family may find themselves with no funds while wills are in probate or if the employee died intestate. The deceased may not have purchased or maintained life insurance due to medical or financial reasons. 

Companies now have the ability to offer employees a much needed financial planning tool – an insurance plan that pays a cash benefit within 2 days of notification of the death of an insured person. Previously available only to members of credit unions, the range of offerings has expanded, allowing companies to administer a group plan on behalf of their employees and up to five family members. The employee can choose benefit payments ranging from $10,000 to $100,000 for each person named under the policy. 

Eligible family members include: 

  • The employee’s spouse or “significant other” 
  • The employee’s parents or the parents of the employee’s spouse or “significant other” who have not reached 76 
  • The employee’s dependent and adopted children aged 1-25. Children who are permanently disabled are covered for the duration of their life once they are enrolled before age 26.

 

The advantages of this ‘bereavement’ policy include: 

  • One monthly installment covers the employee plus up to five family members
  • The employee can choose between six levels of coverage and premiums
  • Cover is for lifetime of the insured, spouse and parents once the monthly premiums are paid. Children who are married or over 25 must take out their own family policy. 

 

There is a 6 month waiting period before the plan is approved. Since there is no medical examination, if any covered person dies during the waiting period, claims would not be allowed, unless the death was accidental. 

The bereavement policy allows for claims to made up to 2 years from the time of death however, no benefit is payable if the death was as a result of engagement in criminal activities. 

There are other benefits to the plan; 

  • Unlike other life insurance policies, this plan does not require a medical examination or declaration. Persons unable to obtain or afford other life insurance products due to medical reasons can effect a higher sum than the actual cost of the funeral in order to leave a small estate.
  • The entire proceeds are paid within 2 days to the named beneficiary, providing needed funds if the deceased was a financial provider.
  • Parents can be covered once they enroll before age 76. 

With good planning, financial issues should no longer be one that employees face following the death of a loved one. 

Companies wishing to find out more about these bereavement policies can call their Account Executive or our Employee Benefits department. Individuals can access a similar annual product through our Group Plans department.