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Employer Life Insurance: What You Need to Know



Life insurance is a popular feature in the benefit package for employees. Many employers provide basic group life to their employees free of charge. More Americans have workplace plans than individual life insurance plans, as reported in a NerdWallet article .

If your employer offers free or cheap basic group life, there is no reason not to accept it. The registration takes place automatically in some cases. Although it is a great benefit, there are some things you should know about the employer's life insurance.

There may not be enough coverage

Coverage amounts are low with group life insurance, usually from $ 25,000 to a multiple of the employee's annual salary. Death benefit may not be enough to protect your family should something happen to you.

You may be able to purchase supplementary life insurance through your work plan. Although coverage is usually guaranteed with basic group life, you may need to fill out a health questionnaire to get supplemental life insurance, and the results will be used to determine your eligibility and rates.

The insurance may not be portable

Coverage with a life insurance policy provided by the employer is usually linked to the job. If you leave your current job, you may not be able to take the insurance with you. Although you may be able to convert your group insurance to an individual life insurance policy, the cost can increase significantly.

You can buy a policy on the open market, but the cost increases as you get older. If you leave your job in 1

0 years, lose your group life insurance and buy an individual insurance to replace it, your premiums will be higher than they would be if you bought life insurance today.

Your choices are limited [19659005] Most Life insurance provided by employers is a type of lifetime. This type of life insurance covers you for a certain period, for example 10, 20 or 30 years. You will probably not be able to buy permanent life insurance through work. Most employers work with only one insurance company, which further limits your insurance options. If you are interested in buying permanent life insurance, such as lifetime or universal life, talk to our knowledgeable agent.

Your spouse may not have adequate coverage

Your employer's benefit package may not provide life insurance for your spouse. Even if it does, the coverage amount will likely be at least $ 100,000. The death of a spouse can put a huge strain on the family finances, even if the deceased spouse did not work or earn a lower amount.

You Can Get More Value For Your Money Elsewhere

Of course, if your employer offers free basic life insurance, you will want to take advantage of it. But what about supplementary life insurance policies available through your work plan? You pay for this coverage, so it makes sense to look around.

If you can find an individual policy that suits your needs at a comparable price, or even a little more, it may be your best option because of its portability. Our agent can help you find the right life insurance to protect your loved ones.


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