Additional Life Insurance

tips_to_have_a_happy_familyMany employees today receive life insurance as part of the employee benefits package. Unfortunately, that still may not be enough to cover one’s insurance needs. Looking for additional life insurance to fill in the financial gaps might be needed.

It is estimated that today, 1 in 4 U.S. families relies on group life insurance to provide fiscal stability in case a wage earner dies. However, while employer-sponsored group plans are often free or substantially cheaper than individual life insurance policies, experts say group plans rarely provide enough coverage and could potentially leave you with big financial problems if you lose your job or move to a different company.

Unlike individual life insurance plans that require policyholders to undergo a medical evaluation to obtain insurance, employer-sponsored group policies offer coverage to all employees for the same rate, even those who may be rejected from individual plans. Employer-sponsored plans present a few problems of their own.

Because they’re created to cover a group, company life insurance policies are generally designed with a one-size-fits-all mentality and may not include certain riders, such as long-term care or accelerated death benefits, that additional life insurance can provide.

The major problem with employer-sponsored life insurance is most companies simply do not offer enough. Employers who offer life insurance benefits typically pay for coverage equivalent to one to two times the employee’s salary. For a young, single employee who’s renting an apartment and has very few debts or obligations, that probably is manageable.

For employees with dependents, company-sponsored coverage is rarely enough. Most group plans allow employees to buy a certain amount of additional coverage, but even that might not be enough. Employees may have to undergo medical underwriting to qualify for the supplemental life insurance, and it could be more expensive than purchasing a separate, individual policy.

For more information, visit our homepage!