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Is it better to get life insurance through my workplace or independently?

Life insurance is part of the benefit package that many employers offer their employees. This coverage can also be purchased independently. Buying life insurance through an employer can have both advantages and disadvantages for the policyholder.

Advantages and disadvantages of obtaining life insurance through the workplace


Many employers offer a small amount of life insurance, so-called base group. life as a benefit to their employees. This coverage is free and guaranteed. You only need to register for it, otherwise the registration can be done automatically. Normally, coverage under a basic group life insurance policy is only $ 25,000, $ 50,000 or the employee's annual salary rounded to the nearest $ 1

,000. In many cases, employees have the option to purchase supplementary group life insurance with coverage that can amount to three to four times their annual salary. . There are several benefits to buying this type of life insurance:

  • Convenience: Many people want to buy life insurance to protect their families, but have not yet gone through the process. Purchasing supplementary coverage through the workplace is an easy way to get this done.
  • Value for money: Supplementary group life insurance can be available at lower prices than you could find if you shopped independently.
    Acceptance: If you if you have a medical condition, it can significantly affect your life insurance rates. You can qualify for much better prices through a group policy. You may need to fill out a questionnaire, but usually no medical examination is required.

Along with the benefits, there are some disadvantages to linking your life insurance to your employer:

  • Career changes: Most people do not live with an employer throughout their careers. If you leave the job, your group life insurance will not come with you. You may be able to convert it to individual life insurance, but the cost can be significantly higher. Group life insurance may not be an advantage that your next employer offers. In that case, you have the opportunity to shop for an individual insurance, but the older you get, the more the prices increase and you can develop a medical condition in the meantime.
  • Limited coverage: You may need more life insurance than you can buy through the workplace. If this is the case, you can buy regular life insurance in addition to or instead of supplementary group life insurance.
  • Limited insurance options: You do not have the full range of insurance options if you buy life insurance through your employer. However, most employers offer long-term life insurance, which is cheaper and the best choice for many people. If you want a full life insurance, our agent can help you find an insurance that suits your needs.

Which way to go?

If you can buy life insurance independently at comparable or slightly higher rates than the extra coverage available through work, it is probably the better option because of its portability. On the other hand, if you have a medical condition and may not be eligible for affordable rates individually, supplemental group life insurance may be the best way to go. Consult our friendly agent for guidance on this important issue.

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