Life insurance from your employer is a valued benefit for millions
Of American workers.
Employer life insurance is a form of group life insurance that’s
Offered to you and your coworkers. It’s typically a set dollar
Amount at smaller companies and a multiple of your salary at
Larger companies. The multiple is commonly one to three times
Your current salary.
The Benefits of Employer Life Insurance.
It costs you nothing (or very little). A big upside to life insurance
From your employer is that it’s usually free. And if there is a cost,
It usually only amounts to a few dollars a month.
You don’t have to take a medical exam.
Life insurance from your employer is typically offered to every
Employee regardless of his or her health status. This can be a big
Plus if you have any health conditions.
It’s convenient.
There’s no need to consider multiple quotes, schedule a medical
Exam, or do any other legwork. You usually only have to fill out a
Form or two and designate a beneficiary.
The Downsides of Employer Life Insurance.
It often falls short of how much coverage you really need. Most
People need much more than one, two or even three times their
Annual salary in coverage to secure their family’s financial future.
In fact, insurance professionals recommend having 10 to 15 times
Your annual income in coverage. This is especially true if you have
Dependents and/or debt. For this reason, it’s best to assume that
Life insurance from your employer probably isn’t nearly enough.
Supplemental coverage can be more expensive than buying
Your own policy.
You often have the option to buy additional coverage through your
Employer… based policy. While this can be a convenient option,
It may cost more than if you worked with an insurance advisor or
Agent to buy your own life insurance policy.
Your options are limited. You usually don’t have the range of policy
Options you’d have if you worked with an insurance advisor or agent.
Your employer can drop it at any time.
You lose your coverage as soon as your company decides to drop it.
And that’s more common now that fewer companies are choosing to
Offer or retain their group life insurance these days.
It’s tied to your employment status.
You also automatically lose your coverage if you switch jobs, retire or
Become laid off. When this happens, you would need to go out and
Buy your own coverage. That can be more difficult as you get older or
If you developed a health condition.
You may not be able to convert your supplemental insurance.
Not all employer life insurance policies let you convert your
Supplemental life policy when you leave the company. If you can
Convert the policy when you leave, expect to pay a rate increase.
Exploring Options beyond Employer Life Insurance.
The potential downsides of employer life insurance often outweigh the
advantages. Out of all the disadvantages, the biggest one is mistakenly
Believing that life insurance from your employer provides enough
Coverage for you and your loved ones.
Make sure you have all the coverage you really need by working with an
insurance advisor or agent. He or she can calculate how much coverage
You really need.
Once you know how much coverage you need, it’s time to compare costs.
Review quotes from your insurance advisor or agent alongside the
Supplemental insurance quote. Know that it may be worth it to pay more
For your own portable, flexible policy that you own and control.
In closing, employer life insurance is a great starting point. But it almost
Never gives you enough protection. So take the time to figure how much
coverage you really need and to consider getting your own policy.
- Amanda Austin
https://lifehappens.org/blog/life-insurance-from-your-employer-usually-isnt-enough/
Hayden Childs
Alabama Licensed Agent
(205) 269-1382
Contact Me Today!
I STILL MAKE HOUSE CALLS!
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