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Employee Benefits: Personal Insurance 101

Employee benefits are perks offered to employees in addition to their regular salaries and usually come in packages. These benefits are essential because they help attract and retain top talent,…

August 19, 2022

Written by Trey Bongiovanni

Employee benefits are perks offered to employees in addition to their regular salaries and usually come in packages. These benefits are essential because they help attract and retain top talent, improve morale, and boost productivity. Businesses can offer many employee benefits, from retirement plans to paid time off and discounts on company products or services.


Personal insurance is a valuable benefit because it protects your employees and their families financially. After all, businesses are only as strong as their employees, and if something happens to an employee, it can have a ripple effect on the entire company. If you’d like to provide personal insurance as an employee benefit but aren’t sure where to start or want to learn more about it, don’t worry.


Read through the article to learn everything you need about personal insurance as an employee benefit. We’ll discuss its importance and the most common types of personal insurance. We’ll also explore how you can help your employees make the most of their benefits package and the different tasks a benefits expert can manage. Keep reading whether you’re starting to research employee benefits or have been offering them for years.

Different Employee Benefits You Can Offer

Law may require employers to offer certain benefits, such as workers’ compensation insurance, but businesses can also provide many voluntary benefits. Not every employee benefit will suit your business, so you should consider which will work best for your employees. Some expected employee benefits include:


  • Retirement Plans: Retirement plans, such as 401(k)s or pensions, function by setting aside money from an employee’s paycheck for retirement.
  • Paid Time Off: Paid vacation days, sick days, and personal days give employees much-needed time to relax and recharge.
  • Health Insurance: This type of insurance helps employees pay for medical expenses, including doctor’s visits, prescriptions, and hospital stays.
  • Personal Insurance: If your employees already have other forms of insurance, personal insurance can supplement their coverage against risks that their policy doesn’t cover.

What Is Personal Insurance, And How Does It Work?

Personal insurance protects your employees and their families financially in the event of an unforeseen circumstance, such as death, disability, or critical illness. This coverage can help with expenses like medical bills, funeral costs, and lost income. For many employees, personal insurance is an essential safety net.


When you purchase a personal insurance policy for your employee, they’re the policyholder, and you’re the payer. You usually deduct the premium from the employee’s paycheck before paying taxes. If the employee ever needs to make a claim, they would submit a request to the insurance company and provide documentation of their loss. Once the claim is approved, the insurer would send benefits directly to the policyholder or their beneficiaries.

The Importance Of Personal Insurance

Employees are the lifeblood of any successful organization. They contribute their skills, knowledge, and efforts toward achieving the company’s goals. Therefore, businesses need to provide their employees with benefits that show they care about their well-being.


Personal insurance gives employees confidence knowing that they and their loved ones will be taken care of financially if something happens to them. It is especially important for employees who are the sole breadwinners for their families. On the other side, businesses may benefit from employees who are more engaged and productive at work because they will have one less worry.

Things That Personal Insurance May Cover

Personal insurance may include many things, but most policies will cover:


  • Death: If an employee dies, their beneficiaries will receive a death benefit to help with final expenses like funeral costs.
  • Disability: If an employee becomes disabled and is unable to work, they may be able to receive benefits to help replace their lost income.
  • Critical Illness: These policies can provide a lump sum payment if the policyholder is diagnosed with a covered condition, such as cancer or heart disease. The policyholder can use the money for medical bills or everyday living expenses.

Types Of Personal Insurance Policies

There are two main types of personal insurance policies: term life insurance and whole life insurance.

Term Life Insurance

Term life insurance is coverage for a set period, such as five, ten, or 20 years. If the policyholder dies during the term, their beneficiaries will receive the death benefit. If they don’t pass away during that time, the policy will expire, and no death benefit will be paid. The premium is generally lower than for whole life insurance, making it a good option if you have a tight budget.

Whole Life Insurance

Whole life insurance is permanent coverage that remains in force as long as you pay premiums. This type of policy also has a cash value component that builds over time and can be borrowed against or cashed out if you need the money. While the premiums are higher than term life insurance, whole life policies offer more stability.


When choosing between term and whole life insurance, there’s no right or wrong answer. It depends on your business’s circumstances, budget, and employees’ needs and preferences.

Helping Your Employees Make The Most Of Personal Insurance

Now that you know more about personal insurance, it’s time to start thinking about how to use it to benefit your employees. Here are a few tips:


  • Offer Multiple Policy Options: Employees have different needs, so you should offer various policy options. You might want to offer term and whole life insurance and different coverage levels.
  • Make It Easy To Enroll: The enrollment process should be straightforward. Employees shouldn’t have to jump through hoops to sign up for coverage. This way, they’re more likely to get insured.
  • Communicate The Benefits: Your employees need to know what personal insurance is and how it can help them. Communicate the details of the coverage you’re offering and why they should have it.
  • Help With Claims: Claims can be complicated, so offer help to your employees through the process. By guiding them, they can focus on recovering from their loss without worrying about paperwork.
  • Keep Them Up To Date With Changes: The personal insurance landscape is constantly changing. Ensure you keep your employees informed of any updates affecting their coverage.

Managing A Benefits Package Independently Vs. With The Help Of An Expert

If you’re considering offering personal insurance to your employees, you might wonder if you should do it yourself or hire an expert. There are pros and cons to both options.

Doing It Yourself

The main advantage of managing your benefits package is controlling every aspect of the process. You can choose which policies to offer and how much coverage to provide. You’re also in charge of enrollment and claims. The downside is that it can be time-consuming and complicated to manage a benefits package independently. If you’re not careful, you can make mistakes that could cost your business a lot of money.

Hiring An Expert

When you hire an expert, you can offload the work of managing your benefits package; this frees up your time to focus on other aspects of running your business. Experts also have the knowledge and experience to guarantee your employees get complete coverage. While you’ll have to pay for their services, this cost is offset by the money you save overall. In the long run, hiring a professional can be a wise investment.

Different Responsibilities Of A Benefits Expert In Your Business

As a business owner, you’re responsible for a lot of things. But when it comes to employee benefits, you don’t have to do it alone. As we mentioned, you can hire a benefits expert to help you with the task. Here are some of the things they can do:


  • Evaluate Your Needs: A benefits expert will closely examine your business and determine what type of coverage you need. They’ll also consider your budget and your employees’ needs.
  • Choose The Right Policies: Once they know what you need, they’ll select the best policies for your business. They’ll help you get the most for your money while choosing the coverage your employees require.
  • Enroll Employees: A benefits expert will handle enrollment for you. They’ll ensure all the paperwork is in order and everyone enrolls in the right plan.
  • Manage Claims: If an employee has to make a claim, a benefits expert will be there to help. They’ll guide them through the process and be ready to answer any questions.
  • Monitor Results And Suggest Changes: A benefits expert will keep an eye on your benefits package and track results. When they identify areas that you could improve, they’ll make recommendations.

Nesso Benefits – Start Your Benefits Plan Today And Make Your Employees Happy

At Nesso Benefits, we recognize that employees are the heart of your business; that’s why we offer professional benefits services to help them stay healthy and protected. We’ll work with you to create a benefits package that meets your needs and budget. You don’t have to worry about any administrative work that comes with offering employee benefits; we’ll handle everything, so you have more time to put into your company’s mission.


In addition to being reliable health and benefits advisors, we’re also part of the Nesso Group. We provide integrated, in-house insurance and financial solutions such as employee benefits, Medicare, accounting, wealth management, and more. Our objective is to give our clients all they require to succeed, and we’re always available to them.



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