Dealing with a critical illness can be devastating, both emotionally and financially. That’s why having critical illness insurance is so important. This type of coverage provides a tax-free lump sum payment if the insured is diagnosed with a specified critical illness. The funds can then be used for whatever the insured needs during recovery—whether it’s paying for medical treatments, hiring a caregiver, or even making modifications to their home.
For accounting firms, providing group critical illness insurance to employees is crucial. Not only does it help attract and retain talented staff, but it also protects the company financially if a key employee falls critically ill. With tax advantages and relatively low premiums, it’s an invaluable benefit to offer.
This guide will give accounting professionals everything they need to know about structuring a group critical illness insurance for accountants. Read on to learn more about what critical illness insurance covers, how much it costs, what illnesses are included, and how to get a customized quote for your firm.
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What is Group Critical Illness Insurance for Accountants?
Group critical illness insurance for accountants provides them a lump-sum cash payment upon diagnosing a specified critical illness. Accountants can purchase it to cover their workforce.
Here’s a quick rundown of how group critical illness insurance works:
- The employer chooses coverage amounts for each class of employee, starting at a minimum of $10,000, as per Manulife.
- Premiums are paid by the employer and the employee or shared between both parties. Premiums depend on factors like the covered conditions, benefit amounts for each employee class, workforce demographics, etc.
- If an employee is diagnosed with a covered critical illness, they file a claim with supporting medical evidence.
- Once approved, the insurer provides the employee with a tax-free lump sum payment.
- The funds can be used for medical bills, recovery, lifestyle changes, alternative treatments, replacing lost income, etc.
In essence, group critical illness insurance for accountants provides much-needed financial resources to employees when they need them most. It’s invaluable for attracting top talent, reducing turnover, and minimizing disruption when key staff gets sick.
Plus, any benefits received by employees are not taxed as income. There are also tax deductions available to employers for any premiums paid. We’ll explore the financial impacts in more detail later on.
Why is Group Critical Illness Coverage Crucial for Accountants?
There are several compelling reasons why group critical illness insurance should be considered an essential staff benefit for accounting firms.
Accounting is a High-Stress Occupation
Firstly, accounting is a mentally demanding profession. Dealing with numbers, deadlines, regulations, client needs, complex calculations, reporting requirements, audits, and more is inherently stressful.
Chronic stress takes a real toll in the form of high blood pressure, insomnia, heart disease, stroke, anxiety, depression, and diabetes. These illnesses appear on most critical illness insurance plans.
Multiple studies have found higher rates of cardiovascular disease among accountants and auditors compared to other professions. According to the American Institute of CPAs, nearly 60% of accountants have experienced depression.
So, offering critical illness insurance helps protect your staff, who may be at increased risk for certain conditions.
Critical Illnesses Can Devastate a Firm’s Finances
Losing an accountant, especially one in a specialized or managerial role, always hurts. But when it’s due to something as drastic as a critical illness, the impacts can linger for years.
You have to factor in:
- Only productivity is available once they can return or are replaced. This averages about 12 weeks of missed time for a cancer diagnosis.
- Recruitment, training, and onboarding costs for new hires. On average, it takes nearly eight months to get a new accountant fully productive.
- Continued healthcare expenses, higher insurance premiums, and disability costs.
- Lost knowledge and specialized skills can only be replaced after a period.
- Lower morale and increased workload for the remaining staff.
- Strained client relationships or loss of clients due to the shakeup.
- Reputational damage if projects can’t be completed on time.
Critical illness insurance helps cushion the blow by injecting much-needed cash to handle these issues. The last thing you want is significant disruption after losing an integral team member.
Attracting Talent in a Competitive Job Market
These days, it’s more challenging than ever to recruit top accounting talent. Firms are engaged in bidding wars, poaching employees, and enticing accountants with generous starting bonuses.
A robust benefits package gives you an edge. Surveys show that the availability of critical illness insurance plays a major role in attracting employees during the hiring process and helping motivate existing personnel.
Let’s face it – most accountants would struggle financially with a severe illness between student loans, housing costs, and everyday living expenses. Having an extra cash injection from critical illness insurance relieves a huge burden.
For employers, it’s a powerful tool for getting applicants’ attention, negotiating offers, and ensuring acceptance.
Enhancing Your Overall Benefits Package
As mentioned above, critical illness insurance also complements existing coverage like disability insurance and life insurance.
Disability insurance only covers a portion of income until the employee can return to work.
Life insurance benefits are only paid out upon death.
Critical illness insurance fills a significant gap – providing a lump-sum payment to employees diagnosed with a major specified illness who need financial help.
Instead of picking between the three, enlightened employers realize offering all three provides the most well-rounded benefits package.
What Critical Illnesses are Typically Covered?
Critical illness insurance plans don’t cover every disease or health condition under the sun. Instead, they focus on the most common serious illnesses.
Coverage varies by provider, but most group critical illness insurance policies cover the “big three”:
- Cancer
- Heart Attack
- Stroke
These three conditions account for over 80% of critical illness insurance claims.
Beyond the big three, other typical covered critical illnesses include:
- Alzheimer’s Disease
- Benign Brain Tumor
- Blindness
- Coma
- Coronary Artery Bypass Surgery
- Deafness
- Heart Valve Replacement
- Kidney Failure
- Loss of Limbs
- Major Organ Failure
- Multiple Sclerosis
- Occupational HIV Infection
- Paralysis
- Parkinson’s Disease
- Severe Burns
Many policies also offer partial payouts (around 25%) for less severe conditions like:
- Coronary Angioplasty
- Ductal Carcinoma in Situ
- Early Stage Cancers
- Mild Heart Attack
- Minor Stroke
Understanding which conditions are on the table before structuring a group critical illness plan for your accounting firm is essential. Be sure to consult with providers on any illnesses specific to your workforce. For example, accountants spending considerable time behind computers may need to look into vision loss coverage.
How Can Accounting Firms Structure Their Group Critical Illness Insurance Plan?
Accounting firms have flexibility when setting up a group critical illness insurance policy. Here are some of the key decisions in the process:
Determining Benefit Amounts
First, you’ll want to establish benefit amounts for different classes of employees.
For instance, you may decide on:
- $30,000 for Principals/Partners
- $20,000 for Managers
- $10,000 for Senior Accountants
- $5,000 for Support Staff
Benefits often range depending on your intentions. When deciding on the amounts for each tier, consider factors like income levels and employee needs.
Setting Up Eligibility Requirements
Next, determine your eligibility rules. Will coverage extend to:
- Full-time employees only?
- Part-time staff also? If so, how many minimum hours per week?
- Employees who’ve passed their probation period? Or immediately upon hiring?
You’ll also need to decide on age limits. Most providers allow coverage into the early 70s.
Choosing Optional Benefits
Beyond who’s eligible, you can select optional benefits like:
- Dependent coverage – Employees can add spouses and children for an additional premium.
- Recovery benefit – Provides an additional payment if an employee receives a total payout and later recovers from the illness.
- Recurrence benefit: This benefit offers another full payout if an employee has a recurrence of the same critical illness later on.
- Waiver of premium – Waives the insured’s premium payments while receiving disability benefits.
- Conversion option – Allows employees who leave to convert their group critical illness insurance into individual policies without medical underwriting.
Discuss all available options with your insurance broker when designing your benefits package.
How Much Does Group Critical Illness Insurance for Accountants Cost?
Premium costs for group critical illness coverage depend on several important factors:
- Benefit amounts for each class of employee. Higher payouts mean higher premiums.
- The demographics of your workforce. Age, gender, smoking status, and location all impact pricing.
- Which illnesses are included? More covered conditions increase costs.
- Dependent coverage. Including spouses and children raises premiums.
While pricing varies case-by-case, we can provide some general estimates:
- For a lower-level employee with $10,000 in coverage, expect monthly premiums of around $7 to $15.
- For an executive with $50,000 in coverage, monthly premiums often range from $30 to $60.
- A younger workforce helps lower pricing, while older employees raise the rates. Including less common illnesses like Alzheimer’s also pushes premiums higher.
All in all, group critical illness insurance represents a relatively inexpensive benefit. Employers paying some or all premium costs provide substantial financial protection at low employee costs.
There are also ways accounting firms can reduce costs:
- Increasing deductibles and waiting periods
- Limiting coverage to higher benefit amounts on upper management only
- Excluding some less common conditions from the policy
- Offering policies with reduced initial coverage that increases over time
- Choosing a more extended benefit payment schedule (like over 5 or 10 years) rather than lump-sum payouts
Any experienced group insurance broker will walk you through all the cost considerations when designing your policy.
How Can Accountants Get a Group Critical Illness Insurance Quote?
If you’re ready to explore group critical illness insurance for your accounting firm, here are some tips for getting quotes:
Work With a Reputable Broker
Your first call should be to an independent insurance broker specializing in employee benefits. They have access to the group critical illness insurance plans from Canada’s top providers.
An experienced broker will also guide you through the process, explain all your options, and provide impartial advice – not just push certain products.
Provide Employee Census Data
You’ll need to furnish details on your workforce as part of the quoting process. This employee census gives insurers the data they need to price your coverage.
Information requested generally includes name, date of birth, gender, smoking status, coverage amounts, and dependent details. Providing accurate statistics is crucial for receiving an accurate quote.
Compare Plans From Leading National Insurers
Top insurance companies like Manulife, Sun Life, Canada Life, Desjardins, and others have specialized group critical illness offerings.
Your broker will present proposals from several providers for consideration. Before making any decisions, be sure to compare policy details, pricing, exclusions, limitations, and other fine print.
Accounting firms have a lot to gain by offering group critical illness insurance. For minimal employer cost, it provides employees with tremendous financial reassurance.
If you’re ready to enhance your benefits package, contact a trusted brokerage to start reviewing options today.
Frequently Asked Questions About Critical Illness Insurance for Accountants
There are always plenty of questions surrounding critical illness insurance and how the coverage works. Here, we’ll address some of the most frequently asked questions by accounting firms:
How are claims filed and paid out?
Employees submit claims to the insurer along with supporting medical evidence. Claims should be reported as soon as possible after diagnosis. The insurer will review the documentation and determine if it meets the policy's criteria for the related critical illness. If approved, the total benefit amount or partial percentage is paid out in a tax-free lump sum to the insured.
What medical information is required to file a claim?
Insurers require documentation confirming a medical specialist's diagnosis, lab tests, pathology reports, and other records related to the illness. The employee's treating doctor often participates to ensure adequate evidence is provided.
Are there any exclusions?
Most policies exclude claims within the first 90 days for cancer or in the first 30 days for other conditions. Pre-existing conditions diagnosed or treated within a specified period before coverage starts are also often excluded. Illnesses caused by drug or alcohol abuse, self-inflicted injuries, war, or high-risk activities may not qualify.
Does the employee have to be unable to work to claim benefits?
No, the ability to work has no bearing on receiving critical illness benefits. Payouts are based strictly on the diagnosis of a covered disease—regardless of the employee's occupational status. However, separate disability insurance may apply if the employee is unable to work.
Are there limitations on how the money can be spent?
Insurers generally impose no restrictions on how claimants use their critical illness benefits. The funds belong entirely to the insured to spend as they see fit - medical bills, renovations, alternative treatments, daily living costs, or anything in between.
What is the claims process like?
Insurers endeavour to make the claims process as simple as possible for those suffering from a critical illness. Dedicated case managers are assigned to handle submissions and guide claimants through any documentation requirements. Decisions are generally provided within 1-2 weeks, and prompt lump-sum payments follow claim approval.
Do benefits reduce with age?
Benefit payment amounts stay the same as the employee ages. Coverage stays fixed at the defined amount throughout the policy term, regardless of age. However, premiums generally do rise incrementally as employees get older.
Is a medical exam required to qualify for coverage?
Medical exams and health questionnaires are rarely required outside of a few cases for group policies. Any employee who enrolls within 31 days of initial eligibility gets guaranteed coverage in most instances. Those enrolling later may have to provide evidence of insurability before coverage takes effect.
Can coverage be taken with employees if they leave the firm?
Most group critical illness policies include a conversion feature allowing employees who leave your firm to convert their coverage to individual policies. The conversion ensures they keep ongoing coverage without undergoing medical underwriting. Converting employees pay the insurer's standard individual policy premiums.
Conclusion
Critical illness insurance provides vital financial protection for accounting firms and their employees. It supplies much-needed cash to help bear the costs of serious diseases that can strike at any time.
Group critical illness coverage allows staff to focus on recovery rather than finances. The lump-sum payouts can be put toward medical bills, lifestyle adjustments, alternative treatments, etc.
For employers, it’s an invaluable tool for retaining personnel, maintaining productivity, reducing turnover, and minimizing disruption following an employee’s critical diagnosis.
With tax advantages and affordable premiums, adding group critical illness insurance to your existing benefits package is a true win-win.
Now that you better understand this invaluable coverage, it’s time to explore options for your accounting firm. Reach out to a reputable benefits brokerage to receive quotes from top-rated insurers. Protect your most important assets – your people – with the financial safety net of critical illness insurance.
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Article Sources
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