Treasure Hunting 101
Looking for "Financial Planning Gold"
A big part of why I am still passionate about the financial planning profession after 30 years is that I positively love the thrill of "treasure hunting" - that is the delight I derive from combing through piles of dry, arcane client documents in search of mistakes, oversights, and opportunities. One of my favorite “honey pots” is the client’s employee benefits handbook. In my experience, few workers read or even know of the existence of the benefits guide that is provided by their employers. For me, mining this document frequently yields hidden financial planning gold.
One of the most common nuggets I discover for Hawaii clients whose employers offer group medical benefits through HMSA is the existence of group life, long term disability, and AD&D coverage that they did not know they have. These ancillary benefits are typically included in HMSA group medical plans that are paired with vision plans, and they are often poorly disclosed in benefits handbooks.
Example: Common Shortcomings in Life Insurance Benefits
Life insurance benefits under HMSA’s vision plans tend to range from $25,000-$50,000, depending on the particular vision plan the employer selected, and the coverage may or may not include a nominal spousal/child death benefit. The plans may or may not include provisions for accelerated death benefits and/or accidental death & dismemberment as well. Additionally, some of these plans include long term disability coverage of up to $1,200 per month.
These benefits are generally free to all participants in the employer’s group medical plan, but in my experience, most participants have no idea they are entitled to them. I often wonder just how much group life insurance and LTDI under these plans goes unclaimed when participants die or become disabled. I would wager that it is a high percentage.
To prevent that from happening to FPH clients, we record these benefits in eMoney and make sure our clients complete beneficiary designation forms for the life and AD&D insurance coverage with copies stored in the eMoney document vault.
John (“J.R.”) Robinson is the owner of Financial Planning Hawaii, Inc. and a co-founder of Honolulu-based fintech software developer, Nest Egg Guru.
Unclaimed billions: Are you owed a life insurance payout? (NerdWallet)
Disclosures: Securities offered through J.W. Cole Financial, Inc. (JWC) member FINRA/SIPC. Advisory services offered through Financial Planning Hawaii and J.W. Cole Advisors, Inc. (JWCA). Financial Planning Hawaii and JWC/JWCA are unaffiliated entities.
Fee-Only Financial planning services are provided through Financial Planning Hawaii, Inc, a separate Registered Investment Advisory firm. Financial Planning Hawaii does not take custody of client assets nor do its advisers take discretionary authority over client accounts.
The information contained herein is general in nature. Neither Financial Planning Hawaii nor J.W. Cole provides client-specific tax or legal advice. All readers should consult with their tax and/or legal advisors for such guidance in advance of making an investment or financial planning decisions with tax or legal implications.