Employer-provided grouplife insuranceis a wonderful thing, but it's just not enough on its own. You can have more than onelife insurance policy, and these group life insurance plans are an excellent, inexpensive way to supplement your policy. What you shouldn’t do is rely on your employer’s plan as your main source of protection.
3 Reasons Why Your Employer’sLife InsurancePlan Is So Great
1) You are automatically approved upon hiring.
This is a big deal. Even if you have a major medical issue like diabetes, epilepsy, a history of cancer, etc you are still enrolled in the plan.
2) Your family has your end-of-life expenses taken care of.
Most of the group insurance plans I have seen offer enough coverage to pay for end-of-life expenses. While you are still actively working this is a great fringe benefit. Your personallife insurancetotal should always include enough to also cover end-of-life expenses, but a free plan from your employer gives it a little extra bump.
3) Did I mention that it is usually free or super inexpensive?
Life insurancecoverage for free is a beautiful thing. Now, nothing inlife is perfect, and that includes employer-paid life insurance. It cannot be your main source of protection because of its limitations. You need to have your policy as your family’s first line of defense. It is a guaranteed way to financially protect them in the case of your untimely demise.
The 3 Ways That IndividualLife InsurancePicks Up The Slack From Employer-provided Life Insurance:
1) You can’t take an employer plan with you without paying more, but your plan has a locked-in, level price.
If you want to take your grouplife insurancepolicy with you, most of them require you to convert your group policy into a more expensive permanent policy. This increases the cost a great deal, and it can make the policy too expensive to keep. If you find yourself in this position you can usually do better on your own with a broker. To keep yourself out of this position, buy your policy soon. The earlier in life you buy one, the more affordable it gets. Research your group policies and conversion rules, get the facts, and protect yourself.
2) Your employer’s plan is usually not enough, but you can customize your plan to meet your needs.
Should you ever turn down the freelife insuranceyour employer offers you? Not, you can have your employer’s policy PLUS an individual policy or two. The problem is that it is often not enough. Most of us get a moderate policy as a token of appreciation. However, it can be a supplement to your policy. Run the numbers and find out what your family needs if you were to pass tomorrow. Use that as the basis for your policy.
3) Not every employer has it, but your plan stays with you through all of your career changes.
If you are like most Americans, you have switched jobs once or twice in the past, and you will probably do it again. Even if all your previous employers offered generouslife insuranceplans, you cannot count on your next employer doing the same. Plus, when you retire you will have to decide on how to carry on yourlife insurance. Buy your life insurance policy, and just use the employer plans as supplemental policies.
The Takeaway
Thank your employer for theirlife insuranceplan, they are doing you a huge favor, but then put pencil to paper and figure out how much your loved ones will need if you were to pass tomorrow. Talk to your local broker, ask for thelife insuranceexpert, and schedule a sit-down meeting to talk about your policy. Bring all of your information on your grouplife insurancepolicy, your monthly budget, and your financial portfolio. The broker’s expert will advise you on what type of policy, or combination of policies, best fits your financial needs and goals.