Is Life Insurance At Work Enough?

Many people who have life insurance at their job wonder if they really need to purchase a policy outside of that. This guide will help you determine if your work insurance is really enough. Let’s take a look.

Here are some great things about getting life insurance at work…

• Low premiums– Group life insurance is very affordable. The company you work for may also fully cover or subsidizes the premium.
• Very few health questions– Since employers offer group coverage the health risk is spread across more people which allows the insurance carrier to be more lenient with underwriting.
• Payroll deduction– There are no bills or due dates to keep track of because the premium comes directly out of your check. Out of sight out of mind.

Here are some things to consider about your job’s life insurance plan…

• Possible plan termination-Life insurance isn’t a required benefit and can be taken away at any time. This can present a major problem. If your job cancels their life insurance plan and you’re much older there will be higher premiums to deal with which may limit the amount of coverage you can afford. Additionally, if your health had declined significantly you may not qualify for a policy without a waiting period. Take a look at what happened to thousands of retired Sears employees when the company suddenly cancelled their life insurance plan.
• Retirement or job change– According to the U.S. Bureau of Labor Statistics Americans change jobs on average every 5 years or less. When you change jobs or retire you may not be able to keep your coverage. If you can keep the policy the benefit amount may be significantly reduced, and the amount you pay my increase. Also remember, the older you are the more your life insurance will cost. Putting it off until retirement can be very costly.
• Insufficient amounts of coverage– Most employers that offer life insurance don’t provide large enough amounts for many families to be sufficiently protected. A personally owned term life insurance policy will general provide higher limits of coverage
• Limited flexibility– Most life insurance offered through jobs offer very few options as far as policy type and available riders.

Here’s what we recommend

• Speak with HR at your job– The HR administrator or benefits coordinator should be able to explain the details of your plan. If not they can connect with the life insurance company. Here’s what you need to know.
  • Can you keep the policy if you quit or retire?
  • Will the price go up if leave the job for any reason. If so, how much?
  • How high can you increase your coverage if needed.
  • Are benefit amounts reduced when you retire.
• Assess your life insurance needs– You will want to take a look at both your short term and long-term goals to determine if your employer’s offerings will work for you.
• Speak with a qualified agent– It’s always a good idea to get an expert opinion. A good life insurance agent will help you uncover any gaps in your plan and help give you fill them.

When it comes to answering the question “Is life insurance at work enough” the answer is that the majority of Americans have a need for both employer provided coverage and personally owned.

With the zero and low cost plans offered through jobs it makes sense to keep your work insurance while you protect yourself with a personally owned plan just in case. The fact is that most Americans need and should have both.

With some things it’s better to have and not need than to need and not have

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