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4 Reasons to Buy Life Insurance, Even if You Already Have it Through Work

4/6/2021

4 Comments

 
Retrieved from: https://www.businessinsider.com/personal-finance/why-buy-more-life-insurance-outside-work

Tanza Loudenback Mar 12, 2020, 4:42 PM

If you get life insurance for free through work, there's no reason not to take advantage of it.

About 60% of non-government workers in the United States have access to life insurance through work. It's a valuable benefit that employers often offer at no cost to employees. Plus, coverage is guaranteed so you don't have to submit to a medical exam.

But group coverage still may not be enough, particularly if you have a spouse, kids, or other family members that rely on you for financial support. Here's why you may want to consider buying an individual life insurance policy, too:

1. It's probably not enough coverage

Group life insurance is broad and there's no opportunity to customize your policy. Employers typically offer coverage amounts that are a multiple of your salary.

According to the Bureau of Labor Statistics, the median worker with access to group life insurance receives $200,000 in coverage. That's a reasonable amount, but anyone with a family to support, debt to pay off, or big future expenses will likely need a larger death benefit.

2. You can't add riders to your policy

You also can't add riders to a policy you get through work. Riders are additional terms and conditions that enhance your coverage for specific situations. There are riders that allow you to accelerate the death benefit in the event of illness, get an additional benefit for the death of a spouse or child, or add more coverage for accidental death or dismemberment.

3. You can't take your policy with you


Most group life insurance policies aren't portable when you leave your job. While you may have the chance to convert it to an individual policy, you'll have to pay the premiums your employer previously covered.

Since a group life policy is guaranteed coverage — there's no evaluation of your health, age, or overall risk to determine your premium — it will likely be more expensive than an individual policy if you're low risk (e.g. you have no major health conditions).

4. You may want a permanent policy

Most group life insurance policies are term, meaning they last for a set number of years and then expire. Financial experts often recommend term life insurance for most people because it's affordable and acts as a safety net while you build up your savings, but it's not the only option.

If you want to build cash value and/or leave money behind for your spouse, kids, or grandkids, a whole life policy could be a better fit. You may want to consult with a financial planner to see if it's a good option for you.

4 Comments
Group Health link
1/14/2022 06:57:13 pm

Found your post interesting to read. I can't wait to see your post soon. Good Luck with the upcoming update. This article is very useful, interesting, and effective.

Reply
Mia Evans link
7/27/2022 06:21:53 pm

Thanks for helping me understand that experts recommend for people get term life insurance coverage because it is more affordable and will be a safety net for your savings. I want to learn more about this so that I can make an informed decision for myself. So I hope to find a life insurance agency I can trust to talk to about my options and their recommendations so that I will be covered when the day comes that I am older and retired as well.

Reply
Millie Hue link
12/26/2022 09:24:47 pm

It's interesting to know that group life insurance coverage can be turned into an individual policy when leaving a company or job, but you would need to pay the premiums first. I guess it is a good idea to also talk to a professional in this industry to learn more about your options. Also, there might be benefits for you when you choose certain coverages that would match with your needs such as considering a cash in life insurance policy for cash.

Reply
Millie Hue link
12/26/2022 09:25:00 pm

It's interesting to know that group life insurance coverage can be turned into an individual policy when leaving a company or job, but you would need to pay the premiums first. I guess it is a good idea to also talk to a professional in this industry to learn more about your options. Also, there might be benefits for you when you choose certain coverages that would match with your needs such as considering a cash in life insurance policy for cash.

Reply



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