Life insurance provided by your employer is a wonderful benefit. Research from the Bureau of Labor Statistics shows that about 60% of private-sector employers offer group life insurance, and 98% of employees take it. It is an easy way to get some coverage with little to no cost involved, but is it enough?
Group Coverage: Employer provided life insurance is group life insurance. An advantage of group life insurance is that generally you can’t be refused coverage for any reason — you’re approved as long as you’re an employee. It is usually low-cost or free, and you may be able to buy additional coverage at low rates, your policy's face value still may not be high enough.
Most employers allow new employees to enroll for coverage when they are first hired without answering any health questions. This means you won’t be declined coverage. You usually aren’t able to customize the policy features selected by your employer. Some employers also offer guaranteed coverage increases when you get married or have a baby, and because most employers offer payroll deduction, you don’t have to remember to pay the bill.
Let's take the previous instance where you leave the company, and you haven’t stayed for the right amount of time to ensure your coverage transfers over. Your insurability may not be the same as when you got the job. Let's say when you started the job you were healthy and had no illnesses; everything was good, but later you quit, were fired, or whatever the case, and you are no longer insured. Now, when you go out to get new life insurance, whether it be at your next job or on your own, your insurability may have changed, causing your insurability to decrease.
Employer life insurance is temporary. If you leave the company for whatever reason, the life insurance usually terminates about a month after you leave your job, and you end up with no protection. In some cases, you may be able to convert your employer owned life insurance coverage to an individual whole life policy. This option will come with a higher rate.
When you have life insurance through work, the company owns the policy. The benefit amount is typically not more than a year’s salary. They could also choose to get rid of that benefit all together. You should always have ownership of YOUR life insurance policy. By only having employer provided coverage, you may be leaving yourself vulnerable to financial hardship in the event of loss, which is why you need to have an individual policy outside of your employer. Let’s say you have a young child. If something happens to you and your company gives your spouse one year’s worth of salary, will that be enough to take care of the child for the next ten years or so? So, although the rate is low and often free, these policies typically leave the employer under insured. If you have dependents who rely on your income, then you probably need coverage worth at least six times your annual salary.
These are a few reasons why I say it is good to take whatever you can get for free, but you should own what you need. With that said, do you need coverage outside of your employer? Yes, you do! I am happy to give you a FREE quote and work with you to get you properly protected.
Blog Post Categories
RECENT BLOG POSTS
Sharing Life, Hope, Faith and Love Through Jesus Christ!
© 2022 Angeline L. Williams. All Rights Reserved.
Site Design by Williams DocuPrep – Creative Solutions to Help You Spread the Gospel of Jesus Christ!