Is Life Insurance From Your Employer Enough?

Many employers offer life insurance as part of their employee benefit package. This employer offered life insurance is also known as group life insurance.

While this is often a convenient perk as an employee, you must consider your specific needs to evaluate if this coverage really gives you enough protection.

First, we will review some of the advantages of employer life insurance.
One benefit of employer life insurance is the convenience. Life insurance from your employer is typically offered to all employees, regardless of health status. Since the employer already selected the plan, typically all you need to do to enroll is fill out a few forms and designate a beneficiary. These policies are typically free or have a very low cost to the employees.

It is important to also look at the downsides of life insurance provided by your employer.
A disadvantage of group life insurance is that it is tied to employer. This is important to consider for several reasons. First, your employer can drop this benefit at any time, leaving you without life insurance. Secondly, if you change employers or retire, you will lose your current life insurance coverage. Your new employer may not offer group life insurance. Furthermore, if your health declines and you need to leave your job, you could lose your life insurance coverage at the time when your family may need it the most.

Group life insurance is often not enough coverage to offer protection for your family’s financial future. Similarly, employers do not always provide life insurance for your spouse, even if they offer spouse health insurance benefits.

While it is convenient to let your employer do the legwork in choosing a life insurance plan, it does leave you with limited policy options. You will not find the same range of life insurance policy options as you would when working with an insurance broker to find the right plan for you and your family.

While taking advantage of free, basic life insurance offered by your employer is a great start, it is important to review your specific financial needs to make sure you have adequate coverage. Contact us to learn more about how much life insurance you may need and options available.