April Fools’: Don’t let employees be tricked by these common insurance misconceptions

Putting a co-worker’s office supplies in Jell-O or hiding your significant other’s car keys may have made for some harmless fun on April Fools’ day but, when it comes to insurance, it’s not quite as much fun when things don’t turn out as you expected. To help make sure employees aren’t fooled by common misconceptions about insurance, we’ve compiled several ways employees may have the wrong idea about their options for protection.

“My medical insurance will cover my healthcare needs.”

More than 50 percent of workers have a plan where the out-of-pocket liability after HRA/HAS contributions is $1,000 or more.1 Which, simply put, means most employees’ insurance is not going to cover everything. That’s why voluntary benefits can be a critical piece of the puzzle; to help them bridge the gaps in coverage.

“I can’t afford additional insurance.”

Of course, it’s easy to say to an employee “add voluntary benefits”, but money is always a factor. The good thing is, it’s actually more affordable than they probably think. The average American spends $14.40 a week on coffee but, for less than that amount, they could purchase supplemental accident insurance, life insurance or any number of coverages to round out their insurance needs.2

“I have life insurance through work, so I’m covered.”

Life insurance is a crucial piece of an employee’s financial plan. As it stands, there exists $12 trillion of unmet life insurance need in America, the majority of which comes from people who already have life insurance.3 Chances are, even if an employee has life insurance through their employer, they’re underinsured. Most life insurance from employers is one or two times an employee’s annual salary, but financial experts generally recommend life insurance coverage that is five to seven times their salary.4

“I don’t need Disability insurance because of Social Security Disability Insurance (SSDI) and worker’s compensation.”

Disability income insurance can be overlooked because employees think they have alternatives through SSDI and worker’s compensation. The truth is, that workers compensation only covers incidents at work and roughly two-thirds of applications for SSDI are denied.5 Disability insurance pays regardless of where the injury occurred and employees can adjust the policy to their needs to make sure they have enough coverage.

Everyone enjoys a good prank on April Fools’ day. And, while insurance companies and employers certainly are never trying to mislead consumers, the truth is that insurance can be a complicated subject for employees. Misconceptions are to be expected. That’s why it’s so important to keep employees informed. That way, the biggest surprise they’ll have to worry about is a rubber snake in the bathtub on April Fools’ day.


1 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2009-2016.
2 “How much does the Average American Spend at Coffee Shops Each week?” ABC.com. Aug., 2012.
3 “4 ways to bridge the $12 trillion life insurance gap”. LifeHealthPro. Feb., 2017.
4 “Why relying on life insurance from your employer can be a bad idea”. Monster.com. Accessed 5/19/15.
5 “Council for Disability Awarness – Social Security Disability Insurance Data”. June, 2014.