Why Life Insurance From Your Employer is Not Enough?

Why Life Insurance From Your Employer is Not Enough?

Wed, Feb 3, 2021 5:57 PM

Life Insurance

It also falls short of how much coverage you actually need. To cover their family's financial future, most individuals need far more than one, two, or even three times their annual salary in coverage. In fact, insurance professionals suggest that you have coverage of 10 to 15 times your annual salary. If you have dependents and/or debt, this is particularly true. For this reason, it's safe to assume that your employer's life insurance is probably not enough.

 

It's tied to your employment status

 

If you switch jobs, resign, or become laid off, you also immediately lose your insurance coverage. You'd need to go out and get your own coverage when this happens. When you get older or if you have developed a health problem, it can be more difficult.

 

Your options are limited

 

If you worked with an insurance broker or agent, you typically don't have the variety of policy choices you'd have.

 

An employer can remove it at any time

 

As soon as your company decides to withdraw it, you lose your coverage. And now that fewer companies are opting to sell or maintain their group life insurance these days and that is more common now.

 

Why Life Insurance From Your Employer is Not Enough?

 

Supplemental coverage can be more costly than purchasing a policy of your own

 

Via your employer-based policy, you also have the opportunity to purchase extra coverage. Although this may be a convenient choice, purchasing your own life insurance policy may cost more than if you worked with an insurance broker or agent.

 

You will not be eligible to get your supplemental insurance converted

 

Not all employer life insurance plans allow you, when you leave the company, to adjust your supplemental life policy. When you leave, you will convert the policy, expect to pay a rate increase.

 

Beyond Employer Life Insurance Benefits

 

Employer life insurance's possible downsides also overshadow the benefits. Out of all the drawbacks, the greatest one is falsely thinking that your employer's life insurance provides you and your loved ones with adequate coverage.

 

By consulting with an insurance broker or agent, make sure you have all the coverage you really need.

 

How much coverage you actually need?

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