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family laughingIs Employer-Sponsored Life Insurance Enough For You?

One convenient way that many people get their policies is through an employer’s supplementary life insurance plan. Often, these plans are more affordable and still quite adequate to cover the life insurance needs of the average policyholder.

Still, employer-sponsored plans are not fool-proof. Therefore, just because you get this plan does not mean that you won’t potentially need other life insurance. After all, your goal for life insurance should be to give your family as much financial support as you can in the event of your death.

What Does Your Employer Offer?

An employer-sponsored life insurance plan works a lot like an employer-sponsored health plan or other insurance policies. By enrolling in a plan, you will give your employer to deduct a portion of your pay to cover the costs of a term life insurance premium.

Generally, you’ll pay a flat rate for your plan, and most policies are guaranteed-issue up to a certain value. This means that employees can enroll in a plan without a medical exam as long as they do not choose a death benefit that is higher than a certain limit. This is often a great opportunity for older employees or employees with pre-existing conditions to get a plan that they might not qualify for otherwise.

However, because your employer’s coverage might be a bit limited, ask yourself a few questions when deciding whether to enroll in this plan:

  • Can your survivors use this policy’s death benefit to pay for essential costs like your mortgage or car payments in the event of your death?
  • Do you have higher amounts of debt that you might not be able to pay off in-full if you only took the guaranteed-issue amount of life insurance?
  • Will this policy remain in place for a long period of time? If not, then you might not have it around for essential costs later in life.

Depending on your goals for your death benefit, your employer’s policy might not be enough coverage for you. However, that does not mean you should necessarily decline this coverage. Instead, you might buy this policy, but you’ll also have to buy another policy to further shore up your financial security.

Will This Policy Grow and Change With Me?

Over time, your goals for your life insurance might change. Therefore, you might want to increase your policy as you take on more financial obligations. However, you might only be able to change your employer-sponsored coverage once per year, during your annual benefits enrollment period.

Additionally, one thing many people don’t realize is that their employer-sponsored coverage won’t go with them if they change jobs, get laid off or retire. These policies generally only last for as long as you remain employed. Therefore, it’s always better to buy individual life insurance on your own, so that you can keep this policy regardless of any career change you might make.

Contact Price Insurance to discuss you life insurance needs today!