Employee benefits can create a reassuring safety net. Life cover, sick pay, income protection and private healthcare are increasingly important parts of the overall reward package.
The danger is assuming that “covered through work” automatically means fully covered.
Your Employer’s Cover Wasn’t Designed Around Your Mortgage
Take life cover. An employer might provide death in service of three- or four-times salary. Royal London notes that these benefits are often smaller than individually arranged life insurance and, because they are salary-linked, may not provide everything a particular family needs.
Two employees earning exactly the same salary could have completely different requirements. One may rent and have no financial dependants. The other might have a £350,000 mortgage, a partner working part-time and two young children.
The workplace benefit is identical. The financial consequences are not.
That doesn’t make workplace protection inadequate. Far from it: group schemes can provide valuable cover, sometimes without the individual medical underwriting required for personal insurance.
It simply means they should be regarded as the first layer of a financial safety net rather than automatically the final layer.
