What Are the Four Major Types of Employee Benefits? - Growth Freaks

What Are the Four Major Types of Employee Benefits?

Employee benefits insurance

Whether you are an employee or an employer, employee benefits are a topic you should be familiar with. Many people don’t inform themselves on such subjects, and thus they end up not knowing their rights at work. With this, people make sure that their basic needs are met. So, what are the four major types of employee benefits?

What Are the Four Major Types of Employee Benefits?

1. Medical

The first type of employee benefits is the medical one. It’s the most common one and it means that the employer has to cover the expenses for the health insurance. Usually, they also take care of the dental work, the hospital visits and the doctors, vision care or prescriptions, which is great for the employee. Some employers even come up with some savings plan that helps with extra medical needs.

2. Life

This is yet another common employee benefit. They have to provide life insurance at least. Most of them also include accidental death and dismemberment insurance. This means that if the employee dies, the insurance will pay their family in order to support the funeral costs, as well as the living expenses. Keep in mind that if you have both types of insurance (life and AD&D), the family will receive both coverages in case something happens.

3. Disability

The third major type of employee benefits is the disability insurance. It can be either on a short or a long term. If an employee suffers an injury or has to face a lengthy illness, this benefit brings a pay while they can’t work. The short-term type of insurance takes care of a portion of their salary if they’re temporarily unable to work. The long-term disability insurance comes in when an employee who has been ensured goes through a permanent illness or injury.

4. Retirement

The last main employee benefit is the retirement one. Employees can choose a certain percentage of each paycheck they get and put away for the retirement savings. Some employers match their deduction or at least a part of their sum. What’s interesting is that in the private sector, 65% of the employees get their retirement benefits. Meanwhile, the percentage rises to 85% when we’re talking about the people who work for the local or state government.


What are the four major types of employee benefits? Hopefully, the scheme above has answered this question as extensively as possible. As an employer, you should know that these are extremely important for your employees.

Respecting the four major types of employee benefits that are mentioned above represent the first step. It’s the start of building a great relationship with your employees and to make sure they stay with your company.

There are, of course, plenty of other secondary benefits which you can offer. For example, some employees love to receive work phones, cars or laptops, if their type of work requires it. Other companies pay their transportation if they stay late at the office. But besides all this, now you’ll know what to answer next time someone asks you what are the four major types of employee benefits?

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Author: Amanda Knowles