There are other factors to consider when relying solely on your employer’s insurance plan. This article will dive into why life insurance through work may not be sufficient.
You Have Too Little Coverage
With your group life insurance plan, your coverage amount is usually one to three times your annual income. If you have dependents, this equates to a maximum of three years of salary replacement. If your health insurance is tied to your employment as well, replacement coverage will quickly reduce those three years down.
It’s wise to consider any current debts you have. Burdening your family with those debts after your death could spell financial disaster. The best way to determine if your life insurance through work is sufficient is to total all debts, multiply your income by 10, calculate burial expenses, and add those numbers together. This is the ideal amount of coverage you should have to ensure financial stability for your loved ones.
Your Insurance is Tied to Your Employment
If you have decided that the insurance coverage offered through work is sufficient, you need to consider that this coverage may not always be available to you. There is a chance you want or need to change jobs, and you will lose this coverage when you do. Even if you stay with your company until retirement, you don’t get to take your insurance with you. Being that invested in your current position may limit you to new opportunities or cause you to delay retirement.
Like health insurance, your employer may make changes to your group policy that are not in your favor. Or they may decide to eliminate coverage altogether in an attempt to save the company money.
It is also worth a mention that group insurance plans typically include term life insurance plans. Which means that they do have an expiration date. If your term is for twenty years, when that time has expired, so does your policy. This could leave you without insurance coverage at a vulnerable time in your life, and at an age where life insurance may cost you considerably more. Another type of life insurance is whole life insurance, which covers the insured for life. Many individuals opt for this form of life insurance for peace of mind knowing that regardless of changes to their health, their insurance premiums stay the same, and they don’t risk losing their coverage.
Your Insurability Might Change
If you solely depend on your life insurance policy through work, then you need to consider the possibility that you may lose that coverage when you are a less than ideal candidate for a policy. You may have been a young and healthy individual at the beginning of your employment. But as time passes, you may develop medical conditions that make future insurance options limited and much more expensive. As we mentioned previously, your current work policy may change or be eliminated altogether. Where do you plan to obtain a new policy and how do you plan to afford it? These are valid questions to ask yourself when deciding to depend completely on your life insurance policy through work.
Your Insurance Plan Isn’t Customizable
When your life insurance plan through work is purchased by your employer, there is no room to customize the plan to fit your individual needs. What you see is what you get, meaning you may be missing out on additional benefits. You won’t be able to increase your death benefit or add insurance riders to your policy.
One important rider that many individuals opt to add to their policy is an accelerated death benefit rider. This add-on allows the policyholder to obtain a portion of their death benefit prior to their passing to help cover medical bills associated with a terminal illness. Other riders include adding a child or grandchild to your policy or covering accidental deaths.
Your Group Policy Doesn’t Cover Your Spouse
While your life insurance policy through work may offer you coverage, your spouse may not be covered by this benefit. Even if you are the main breadwinner in the relationship, your spouse’s income plays a role in your finances. Even if they are not employed, there are other ways they contribute to the household. Whether caring for dependents or maintaining the home, their contribution does equate monetarily.
Without any coverage for your spouse, you may also find yourself struggling to cover the costs associated with end of life, like medical bills and burial expenses.
On top of their monetary contributions to the household, you may want to factor in extra funds for bereavement leave from work. It is essential that both spouses have life insurance coverage at every angle.
Consider a Whole Life Insurance Policy Through Americo Senior Life
Americo Senior Life helps seniors get the coverage they need through individualized insurance plans with budget-friendly premiums. The only thing you need to do to maintain your coverage is to pay your premiums on time. Your rates will never increase, and if you aren’t satisfied with your plan, you can cancel within the first 30 days for a full refund. Go online and get your free quote today, or check out our resources page for more information about senior life insurance.