Open Enrollment 2026: How to Choose Dental, Vision, Life and Disability (Plus: When to Refinance a Home)

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15:48Sean Pyles:We're back and answering your money questions to help you make smarter financial decisions. This episode, we've got part two of a two-parter about open enrollment. We brought you all you need to know about signing up for health plans in part one. Today, we're tackling all other kinds of insurance you might be choosing.

16:03Elizabeth Ayoola:This could be everything from whether you need additional life insurance to dental and vision insurance, because for some reason, our system doesn't include our eyes and teeth with the rest of our bodies in our health insurance.

16:15Sean Pyles:So today we're talking with April Brazier. She's a knowledge advisor with the Society for Human Resource Management, or SHRM. April, welcome to Smart Money. Thank you so much for having me. I'm so excited to be here. Let's start with what Elizabeth was saying about having separate insurance for our eyes and our teeth. Can you talk with us about why the system is set up that way? Because, you know, I'm not a doctor, but I'm pretty sure that my eyes and my teeth are part of my body. So why aren't they part of my health insurance? That's a really good question, Sean, and definitely happy to answer or at least provide some information on why that could be.

16:51So historically, what had happened was when insurance plans were originally put together, medical doctors had their own type of coverage and they had their own credentials. And so dental and vision kind of went along with that. Now, medical is usually meant to cover emergency. So you're going for regular visits also, but you're going for emergency room, hospital visits, surgeries. Whereas dental and vision is much more preventative. So in most cases, we're not having emergency dental surgery. We're doing maintenance, making sure we're getting cleanings and those types of things. So that's one reason why they're separate, because they're somewhat separate policies.

17:31The other option is that separating them allows people to choose, kind of like an a la carte, what plans that they want to have. So oftentimes now there are people that are married. They may have medical through their own company, but maybe the dental and vision isn't so great. So their spouse may have dual coverage. So it kind of helps people to choose what they really need to have.

17:55Sean Pyles:Can you walk us through what we need to know about dental and vision insurance? Like what terms are people likely to come across that might need some explaining and generally what's covered and what's not covered? So a lot of the terms that you will see in dental and vision are similar to what you'll see in medical coverages. For example, premium is a common one that we see. Premium is basically what you pay each month for the actual coverage. Deductible is what you have to pay out of pocket until the insurance kicks in. This can be a high deductible, low deductible, just really depends on the coverage that you choose.

18:31Copay and coinsurance, in my experience working in benefits, copay and coinsurance were really confusing for people because they're so similar sounding. So a copay is a fixed fee for a service. So for example, you go into the doctor and you pay a$10 copay to go see your doctor. Co-insurance is where you pay a percentage of the cost once you meet your deductible. So copay is a fixed amount. Co-insurance can vary depending on the type of service.

19:00Sean Pyles:So tell us a little more about what tends to be covered here and what's not covered. For dental, typically what's covered is going to be your preventative. So your cleanings, your fillings, x-rays, those are usually covered at 100%. Most of the time you don't have to pay a copay for those because they're considered preventative. The major procedures are ones that are not going to be covered. Or if they are covered, it's going to be at a very low amount. So crowns. That's one of the most frustrating things about dental insurance. I had a root canal a couple of years back and I paid a lot of money for it.

19:34Yes. Same. Yeah, you did too? Yeah. It can be up to 50 % if at all. So some members will do other additional plans, things like limited use FSA plans to help cover costs for incidentals like that. may not be covered. Things like cosmetic, like teeth whitening or braces. Sometimes those aren't covered unless there's an add-on.

19:59Sean Pyles:And then when it comes to vision insurance, it seems like there are some types of procedures that might be covered, but newer forms of technology maybe aren't covered. Like I'm thinking about how when I go to the eye doctor, which I've been going to for many years since I have such bad vision, when I was a kid, I would have that little blow test on my eye to test whatever's going on in my eye. And now they do a scan, but I have to pay, I think$35 for that scan that is more comprehensive, but again, my insurance won't cover it. And that may depend on the type of policy that you have as well. Most vision plans will cover exams, but they're not going to be covering things like the LASIK eye surgeries.

20:38And it's kind of an important point to mention here that dental and vision is really about maintenance. It's not about emergencies. It's not really necessarily about specialties. So when you go to get vision insurance, you're usually allowed one pair of glasses, one pair of frames, or contacts if you choose those. If you lose them, if you break them, you're out of pocket for that. So while they're inexpensive, they're pretty limited on what you can actually get. But that's because they're relatively inexpensive.

21:08Elizabeth Ayoola:So what I'm hearing, April, is if I want fancy glasses, a second pair of fancy ones that's on me. Pretty often, yes. Unless you have a really, really good vision plan. All right, let's move on from eyes and teeth and talk about some of the other insurance decisions people need to make during open enrollment. Maybe the kind that's supposed to help protect your income if something happens to you and you can't provide for yourself or your family. In other words, you're either disabled or you die. Now, Sean and I outlined some of this in a previous episode, But April, let's walk people through this and start with life insurance.

21:41Elizabeth Ayoola:How does it work when you're getting it through an employer? When an employee starts at a position, an employer may already have group insurance or group health insurance. And it's usually a free policy at about one time your salary. So that's a pretty common amount. For example, if you earn$80 ,000, if something should happen to you while you're working with the organization, your beneficiaries would be paid$80 ,000. And I think you mentioned about beneficiaries, Elizabeth. It's really important that when you have life insurance policies that you do add a beneficiary because if you don't, it can get stuck in probate and nobody knows where this needs to be paid out to.

22:19So that's a really, really important step. And often in open enrollment, you can't finish open enrollment before you add those beneficiaries. Kind of an important part about doing this with the employer is there's usually no medical exams because it's a free benefit. So there's usually not medical exams that are required. One important part about this, though, is once you leave an employer, that's gone too. So it doesn't necessarily go with you.

22:44Sean Pyles:Yeah, I will say some plans are what's called convertible. So you can maybe take what is a group term life and turn it into your own whole life. And that's nice because sometimes you still don't have to have a medical exam for this. But going from term to whole can be a pretty expensive conversion typically. Yes, it is. And I'm glad you mentioned that, Sean, because there are some plans that are portable and there are some plans that are conversions. Unfortunately, those are often much more expensive to transfer those into your own individual policy than it would be if you were paying for it with your employer.

23:16Sean Pyles:And is there anything else that folks should know about what's included in one of these group life insurance plans? We have a basic group life insurance plan here at NerdWallet and the coverage isn't great. I want to say it's just$50 ,000 for the standard amount, and then you can pay for more on top of that. Sure. Yes, that's actually a very common feature. It's called supplemental group life insurance. And you can add up to five times your salary, but there may be a medical exam or an evidence of insurability called EOI. So that can also be a part of the supplement group life planning.

23:52Elizabeth Ayoola:At what point in your life does it make sense for you to sign up for some of the optional life insurance that a workplace offers. Now, I would imagine that younger workers probably are like, no, I don't need that. But do they? And do you generally wait until you've started a family? How expensive are these sorts of life insurance plans when they're provided through a workplace? As a person that's young, it is difficult to determine, do I need to have life insurance? Especially if you're single, you don't have kids, there's nobody really relying on you. A lot of young people don't feel like this is a big thing that they really need.

24:25However, getting life insurance when you're young is often a good idea. One, because when you're younger, you're typically in better health, so you're going to get better premiums. The other is it's pretty inexpensive. You're looking at a couple dollars per paycheck, so maybe five bucks a paycheck for up to$100 ,000 of insurance. As you age, the coverage can go down. So you may be in your 60s and all of a sudden you're paying the same premium and you're getting half of that. So some of those policies can decrease with age.

24:59Elizabeth Ayoola:And then quickly, April, for younger people who may think they don't need life insurance, can you give maybe one or two examples of why they might, especially if they don't have any kids or any dependents? Well, because it's inexpensive. So that's one good option. And it can also kind of help you set up yourself in the future. So you can lock in a rate for 20 to 30 years. So if you're 21 years old, yeah, you may not need life insurance right now. But 20 years from now, you may have a spouse, you may have children. And having that lower rate can help you get to a more responsible financial future.

25:32Sean Pyles:And even if you just have a cat at home, your life insurance benefit could go to maybe rehoming that cat. Giving support for your cat home. I get it. Cat dogs. Yeah, it's fine. Think about who would have a hard time if you were gone financially. That's going to be your cat sometimes. That's true. Another aspect of open enrollment that a lot of folks will come across is accidental death and dismemberment, which is a little bit gruesome. Can you explain those and how our listeners should think about these options? Yeah, this is often known as AD &D. Very rarely in my experience have I ever seen it actually spelled out.

26:08During open enrollment, it's really easy to go through all of these supplemental options. and just completely miss exactly what it's for. So accidental death and dismemberment really pays out a lump sum if you die or you're seriously injured in some sort of accident. Car crashes, falls, or sudden unexpected, okay? If you die in an accident, your beneficiaries get a payout. If you lose a limb or your eyesight or there's certain permanent injuries that you have, you can get paid while you're still alive. However, AD &D only pays for accidents. If you die from an illness, you get nothing. It's a good idea to have AD &D if you have a really risky job, like construction, manufacturing, factory work, if you drive long distance, or if you're really, really active and you play in a lot of sports.

27:01That's generally when we'll see it.

27:03Elizabeth Ayoola:Well, could this be a substitute for life insurance, or is it something you have alongside life insurance? Generally, it shouldn't replace life insurance because it's an add-on. It only counts if you get in an accident. If you die, AD &D does not pay out. I'm sorry, if you die from illness, it doesn't pay out. I apologize.

27:20Sean Pyles:So April, let's move on to disability insurance. Can you talk us through what it is and what it usually covers? Disability is a key but often overlooked part of financial protection. So disability insurance will replace a portion of your income if you become sick or injured and you can't work for a period of time. It can help you cover bills, mortgage, groceries, basically day-to-day expenses while you can't work. Two different types. It usually covers when you can't perform your job, usually kicks in after a waiting period. Those may vary depending on the policy. And it covers about 60 to 70 % of your income.

27:55So it's not 100%. Short-term disability usually covers things for up to six months. So for example, surgeries when women have children, that's typically when short-term disability will kick in. Long-term disability, hence the name, is a little bit longer. So it can last up to retirement age, depending on the policy. However, not a lot of employers offer it. So if you don't have long-term disability insurance, someone could actually review and find a long-term disability policy.

28:27Sean Pyles:And there are also different types of disability insurance that cover you based on how well or not you're able to do any type of work or your own type of work. I'm thinking things like any occupation or own occupation. Employers don't tend to offer that specific type of disability insurance, right? Or do they? So when you're looking at disability plans, it's really important to check what the definition of disability is in the plan. So there are some plans that will allow you to work. It will only pay if you're unable to work any job. Or there's some that will pay if you can't do your specific job.

29:02So your specific job is typically less expensive than it is if you can't do any job. So if you can't do any job at all, that's typically a more expensive policy.

29:12Elizabeth Ayoola:Well, what should people know about buying an individual disability policy? Well, I think it really depends on what your long-term goals are and what you really need from a disability policy. So look at your overall health, what your financial responsibilities are, and really try to determine what you may need. All right, let's move on to something called hospital indemnity insurance. Is this something that's usually offered by employers in a benefit package? Absolutely, yes. And I've had experience with this particular benefit. So I had a really, really good friend that had a really high deductible plan.

29:49So I won't go into that since you guys have already talked about that. But her high deductible health plan, she had not met her deductible. And she was unfortunately transmitted to the ER for a really serious health illness. We all know ambulances are not cheap. Hospital bills are not cheap. And she ended up having to stay for about two weeks since she had a surgery. So she did not have hospital indemnity insurance. And her bill was about$30 ,000. That was a really, really difficult time for her. After that, she got hospital indemnity. But what that does, it's a supplemental plan and it gives you a set cash amount.

30:26So it can help you pay for your regular health insurance, things like surgery, deductibles, or everyday expenses that you may not have money for while you recover. It's pretty inexpensive. It's about$10 to$30 a month for open enrollment. And whether you need it really depends on your financial situation. If you have a high deductible health plan that you don't think you're going to hit very often, might not be a bad idea. If you have limited savings, might not be a bad idea either. But that really just depends on an individual.

30:57Sean Pyles:All right. Well, let's turn to critical illness insurance for us. It's pretty much what it sounds like, right? Insurance in case you get a critical illness. That's absolutely correct. And my sister actually had to utilize this. What critical illness does is it pays you a lump sum if you are diagnosed with a serious condition like cancer or you have a heart attack or you have a stroke. that gives you a lump sum of money to help you pay for bills while you're recovering. My sister, unfortunately, had a very serious cancer diagnosis pretty recently. And yeah, she's doing great now. But at the time, we were really unclear.

31:35And she talked to me about this right before she went in for treatment. And she said that she had a critical illness insurance plan and it paid her an X amount of money. So while she was in treatment and she wasn't getting paid, her family could still support themselves. And so it was a huge benefit for her. And she ended up doing the critical illness because our family, unfortunately, has a high risk of cancer and stroke. So she added that onto her plan at open enrollment. So it was critical for her and it really made her illness much more manageable.

32:11Sean Pyles:I'm really glad that she had that. But hearing about the critical illness insurance and hospital indemnity insurance and then dental and standard health insurance, just having these all stacked up kind of underscores how absurd our health care system is. It's a lot. It's like a Jenga stack of health care and one wrong block and it's all toppling down.

32:30Elizabeth Ayoola:But it also reminds me how personal health insurance is. And, you know, the example you just gave of your sister looking at your family health history and realizing, hey, this is something I need. The importance of maybe taking a personal inventory of your health and your finances along the other things and then choosing insurance that fits with that. Absolutely. That's a great point. And that's really what doing open enrollment is about, is really looking at your financial situation, what you have and what your goals are and what you need to provide for your family and yourself.

33:00Sean Pyles:Going back to critical illness coverage, can you define what exactly a critical illness is? You mentioned a couple. So I'll give you a couple of different examples. So for example, cancer, if you have MS, so multiple sclerosis, ALS, stroke, it depends on the type of policy. Some of them have very distinct amounts of what is considered critical. Some are a little bit more flexible on that. I do know from my sister's experience, generally, in order to be able to receive those type of funds, a doctor would have to certify that you actually do have that. So you can't just call and say, yeah, I was diagnosed with this to get that lump sum.

33:36There usually is some medical documentation that's applicable.

33:40Elizabeth Ayoola:And is critical illness insurance cheap? What's the cost for this? Somewhat varies depending, again, about the state and the policy, but generally about maybe$10 to$30 a month. So not exceptionally expensive. But again, if you have a history of family illnesses or other diseases, you know, that$10 to$30 a month could pay off big time. I'm just thinking about people who are worriers and overthinkers and maybe over planners. And hearing this episode may make them feel like they need to get all of the insurance. So is it possible to be overinsured? Is it possible that maybe you're trying to cover all the bases when life is just going to happen to you and you can't protect yourself from everything?

34:20I think that's a really good point because I was actually talking to a colleague and we were talking about over insurance and she said, is that really a thing? And I said, well, it could be if you have too much coverage. So let's say you have a dental plan. Let's say you have a dental plan and you have a second job. So you have dental coverage with both. But what happens if your dental coverage doesn't allow dual coverage? So you have your primary care and it won't allow you to do a dual care. So you're paying for dental coverage that you can't use. So that might be an example of an overinsured.

34:54And really kind of determining what your lifestyle is. I think that's an important aspect in determining if you are overinsured. Does your medical plan fit your needs? I know as I got older, I used to have a high deductible health plan because I was healthy. I didn't, you know, I was young, 25, 26 years old, no big deal. But as I got older, that's when you need to start looking at your plans and going, okay, do I really want to pay$40 every time I have to go to the doctor and doing all of these extra tests and blood tests and all this other stuff? Do I really need to do that? Or should I change my plan?

35:27So really taking the time to look at that and what your needs are.

35:31Sean Pyles:April, we've talked about a lot of different kinds of insurance here, but I'm wondering if you think there's anything else that we missed or maybe that folks should be aware of during open enrollment? I think one of the biggest things that people need to be aware of when doing open enrollment is to really take an inventory. And I think I've said that a couple of times, but it bears to be repeated again. A lot of people wait until the absolute last minute to do open enrollment, and they tend to just choose the same things over and over again without really knowing what they're getting. Sometimes plans can change.

36:01Sometimes coverage has changed. Things may need to be adjusted in order to fit your needs. So for example, maybe you got married. Maybe you had a child. Maybe that particular dental plan may not work anymore. Maybe you need to add dependence. So not waiting until the last minute in order to really ensure that you have the time to review this information and really ensuring that you have the time to ask the questions. I remember in my previous role, I would have to chase people down to do open enrollment because they didn't know what to do. So if you don't know, ask.

36:35Sean Pyles:Spend the time, do your homework, do it the right way and make a smart decision. Yes, absolutely. Well, April Razor of SHRM, thank you so much for coming on and thanks for your help today. Thank you, Sean and Elizabeth. I appreciate your time. Everybody have a great day. And that's all we have for this episode. Remember that we are here to answer your money questions. So turn to the nerds and call or text us your questions at 901-730-6373. That's 901-730-NERD. You can also email us at podcast at nerdwallet.com.

37:03Elizabeth Ayoola:Join us next time to hear about how to budget for irregular expenses. Follow Smart Money on your favorite podcast app that includes Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes.

37:15Sean Pyles:Here's our brief disclaimer. We are not your financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.

37:24Elizabeth Ayoola:This episode is produced by Tess Wiglin and Anna Helhoske. Hilary Georgie helped with editing. Nick Kershmi mixed our audio. And a big thank you to NerdWallet's editors for all their help.

37:35Sean Pyles:And with that said, until next time. Turn to the nerds.

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