Securing your employer’s group life insurance plan can go a long way. However, it may not go far enough for all your family’s needs. Many employees, especially large families, find that two policies are better than one. Here are important reasons to supplement your employer’s life insurance policy with your own.
Your Employer May Only Offer Limited Life Insurance
Usually, an employer-sponsored life insurance plan is either low-cost or free for the employee. But these group plans often have limited benefits and may not be enough to cover your spouse and a few kids if they are all dependent on your income. The ideal scenario is when your coverage is six to twelve times your salary. That way, when you die, your loved ones will have sufficient coverage to make mortgage payments and plan for the future. The benefits will also pay for your funeral expenses.
Job Changes Can Impact Coverage
Another potential issue you face with an employer-based group life insurance plan is that if your job changes, so can your coverage. It’s possible to lose your coverage if your employer has to lay off workers due to budget tightening. Even switching from full-time to part-time status can result in losing benefits. There’s also a chance you can keep your full-time position yet lose your benefits if the company decides to cut costs.
Health Issues Can Affect Life Insurance Coverage
Suppose you suffer from an illness that forces you to leave your job. In that case, it could mean giving up life insurance coverage which puts you in a worse financial situation. The more serious your condition is, the harder it will be to find an affordable life insurance plan. Insurance companies don’t like to take on clients that pose immediate risks.
If Your Spouse Doesn’t Have Enough Coverage
An employer’s benefits package typically provides enough health insurance for you and your spouse but not necessarily adequate life insurance. Usually, a minimal policy provides coverage of up to $100,000, which may not be enough to pay off a mortgage. Many employer group plans only offer term life insurance for a set term, such as ten or twenty years. If you have kids and your spouse doesn’t work, you probably need a backup plan beyond a group life insurance policy.
More Affordable Options May Exist
Another reason to pursue a supplemental life insurance plan is if you come across a better and more affordable plan. Remember, the best time to enroll in a life insurance plan with the best rates is when you’re young. Costs will go up the older you get, especially after age 50. It still helps to shop around no matter how old you are just so that you know what’s available. Be sure to ask for discounts if you are a healthy non-smoker.
Customize Your Own Policy to Fill Coverage Gaps
Relying on your employer’s group plan for life insurance can drastically limit your coverage. Think about what your family needs to survive if you cannot continue working. Look at your expenses to determine the amount of coverage you need for a customized policy.
If you have questions about enrolling in a life insurance policy, contact our agents at Burton A. Harris Insurance Agency. We will gladly help you with a customized solution based on your personal needs.