When Life Insurance from Your Employer Just Isn't Enough

One of the most valued benefits an employer can offer its employees is life insurance. Employer life insurance is a form of group insurance that many employers offer their employees and families. It usually costs the employee nothing at all or very little.

Benefits of Life Insurance Through an Employer

Again, the life insurance offered through an employer comes with a minimal price tag or none, which makes it a valued benefit for many people. You also do not have to take a medical exam because it is usually offered to every employee regardless of their current and past health status. This is a definite advantage, especially if employees have pre-existing conditions that make it hard to get life insurance independently.

Obtaining life insurance through an employer is also much more convenient. An employee will not have to go through the work of obtaining multiple quotes, scheduling any medical exams, or hunting down the right insurance policy. Usually, with an employee life insurance plan, you simply sign the paperwork and designate a beneficiary.

The Downside

However, even with all the advantages, you still have to consider the downside of employer life insurance. Sometimes, it just isn’t enough coverage. Many people often find themselves needing up to three times their salary in coverage to secure their family’s future financial stability.

Even insurance companies recommend getting a life insurance policy that is up to 15 times your annual income in coverage, especially if there are dependents and a fair amount of debt. So, it might be safe to assume in many cases that employer life insurance just isn’t going to be enough coverage.

Supplemental coverage can prove to be much more expensive to obtain. It is also typically an option, even with an employer-based life insurance policy, but one simply can’t ignore the higher price tag that comes with this supplemental coverage.

Additionally, the employer can drop the employee from this coverage at any time, which means the employee loses the policy. An employee can also automatically lose their coverage if they decide to switch jobs, retire, or are laid off. When this happens, they have to go and secure their own life insurance policy.

Explore Options

When it comes to life insurance and choosing to offer this benefit to employees, employers may even benefit from this with possibly lower rates of insuring the group. In 2018, almost 60 percent of employees had access to a life insurance plan. However, it was not always enough coverage.

So, while it is optional for an employer to offer this benefit to its employees, it is still something to seriously consider. If you are an employee looking for life insurance coverage, it may be best to explore other options because the employer may not offer enough life insurance.

For this, you want to speak to a qualified insurance expert who can help walk you through your options and help you find the absolute best coverage for your needs. So, don’t hesitate to contact the experts at National Insurance Partners today for more information.

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