Many companies offer life insurance policies to employees as a benefit for working there. These are always welcome, and, especially if they’re a free option, tend to be worth obtaining. However, most of these life insurance policies offer limited benefits. Don’t think of them as a solution to your life insurance needs, but rather an added benefit.
There are a few key things to consider when evaluating work life insurance policies, since some plans may let your family down when it matters the most.
What Type of Insurance Is Offered?
Most forms of work-life insurance are term policies that stay in place for the duration of your employment with the company. If you plan to remain with that company for the rest of your life, that could be okay, if the employer continues to renew the coverage for you at each term. If that’s not the case, however, you could run into a problem.
For example, let’s say you take a job at 25, and work for 15 years, with a life insurance policy in place from your employer. Now that you’re 40, you decide to switch jobs, or you lose your job. At this significantly higher risk level, it’s going to be harder and more expensive to obtain a new life insurance policy once yours runs out from your employer.
How Much Is Offered to You?
Most life insurance policies from an employer offer minimal coverage unless they are negotiated by you early on. The question is, do they offer you enough coverage? Life insurance needs vary from person to person. In some cases, you may want a basic policy that provides enough to cover your final wishes and medical needs for your loved ones.
In other cases, you may want your life insurance to cover your family for what your income would have contributed for the next five years or more. You might wish to include more of a payout to cover debts, college educations for your loved ones, and other needs. If so, purchasing an additional life insurance policy with more coverage is nearly always beneficial.
Missing out on Whole Life Insurance
Yet another consideration is what you could be missing by not opting for a fuller, more permanent policy. For example, if you don’t purchase whole life insurance at a young age, you may be missing opportunities to receive dividends from your account later in life. Some individuals also find that work-life insurance doesn’t offer any type of retirement income benefit, either.
Not all work-life insurance policies offer any type of permanent coverage. While not everyone needs or benefits from permanent coverage, many people find it to be a key advantage in the long term. It could be an ideal choice that you don’t want to miss out on.
What Should You Do?
You don’t have to reject the life insurance policy from your employer. If it’s a benefit to working there, take it. However, don’t assume that it’s enough. Instead, consider purchasing an additional life insurance policy that meets more of your needs in addition to your work policy. This can give you the peace of mind you need, and more control over the type, style, and amount of coverage you have.
Sproutt insurance advisors are available to help you determine what kind of life insurance is best for you. Simply answer a few questions and we will find the best-value plan for your lifestyle, needs, and budget.