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This document describes the primary purpose of a group benefits plan, which is to protect participants from financial risks like death, illness, and accidents. It also discusses the financial risk associated with benefits obligations and the various risk management techniques a plan sponsor may consider, including insurance.
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Conclusion A primary purpose of a group benefits plan is to protect plan participants from the possible financial implications of various risks to which most people are vulnerable. By far the most important of the...
Conclusion A primary purpose of a group benefits plan is to protect plan participants from the possible financial implications of various risks to which most people are vulnerable. By far the most important of these are death, illness and accidents. Once committed to offering a benefits plan, a plan sponsor must also consider the financial risk flowing from benefits obligations and liabilities. It may apply the four risk management techniques in varying combinations. One technique it may use is to insure some or all of the benefits offered. Many factors influence the cost of insurance. GROUP BENEFITS PLAN MANAGEMENT 127
