Even if you have life insurance through your job, you may be still among the 50% of individuals in the US who don’t currently have enough life coverage.
Find out why group life insurance may not be giving your family the security they need — and what you can do about it — below.
1. You need more
Group life insurance is affordable. In some cases, it’s even compulsory. Generally, it’s not a bad thing — but it does have its drawbacks. None of us like to think of a time when we may no longer be around. So, we fail to calculate just how much money our family will need on our passing.
Add up the following costs to determine how much life coverage you actually need:
- Cost of a funeral
- Paying off any outstanding debt
- Future costs such as college and child-rearing expenses
- Time off for loved ones to grieve
Often, these expenses will add up to way more than you anticipated. In fact, they can be up to 10 times your annual salary.
With these costs in mind, it won’t take you long to figure out that your existing life insurance is going to fall short. Additional or supplemental life cover is always a good idea.
2. It isn’t forever
Group life insurance is designed with the company you work for in mind. It is based on their track record. It belongs to the company and is not valid after you leave their workplace. If you are laid off or resign from your job, your cover ends immediately.
You may be able to convert this type of cover to individual life insurance. However, you will find that your premiums will undergo a substantial increase.
However, most of these type of company policies are not convertible.
3. Your next job may not offer group life insurance
It pays to get your own life insurance while you are still young and premiums are more affordable.
By the time you leave your job, you could end up having to pay much higher premiums for individual life insurance because of your age.
While it is never too late to take out individual life insurance, you could possibly develop a medical condition later in life. This could push your premiums up. So, younger is always better.
It makes sense to take advantage of your employer’s life insurance. But make sure that you have individual coverage as well.
4. Options are limited
Your employers’ life insurance will most likely offer only general benefits most suited to the majority of employees. By taking out individual life insurance, you are able to choose a policy that suits your unique needs.
Find out from your employer about supplemental plans that you can add on to your group life insurance.
Always take into account whether these are portable, how much they will cost if you leave your job, and whether they meet all your needs.
Make sure your life insurance is adequate
Don’t just go with the flow, consult a financial advisor for advice on insurance coverage plans to suit you.
Get in touch with one of our professional agents to make sure you get what you need.