Many individuals know that I work in the term life insurance industry and ask me in the event the life insurance they get from other employer will do. There are several forms of life insurance that are categorized as the heading of “Employer Life Insurance”. I will try to address their merits individually.

 

Life insurance coverage included as part of your Employee Benefits

 

Many companies that offer medical health insurance benefits have a term life insurance benefit. The facial skin amount is normally either a flat amount (e.g. $10,000) or based on a multiple from the employee’s salary (usually 1 or 2 times the annual salary). Usually this type of coverage is not even optional then there is no reason you shouldn’t accept this benefit.

 

I might caution you against relying on this as your only type of life insurance. Lots of people know that they need life insurance and permit themselves to believe that this benefit satisfies that requirement. If your life insurance needs include paying for a funeral and some bills then $10,000 or your annual salary may be enough. When you have a spouse and kids that depend on your income, than the amount may not be going to cut it.

 

Another problem with relying on this kind of coverage for the life insurance needs is that this type of coverage just isn’t portable. If you leave the organization, then you cannot take the policy together with you. You need to have a policy that you own and will take together with you no matter what your employment situation. You do not want to be at an increased risk while you are between jobs or awaiting your benefits to begin at a new company.

 

Additional Optional Life Insurance as part of your Employee Benefits

 

A lot of companies include a tiny amount of life insurance together with your benefits as I stated above. As a possible additional benefit, many companies give you the option to sign up and purchase more coverage along with your benefits. Most people find this convenient because the premiums are deducted out of your paycheck exactly like your health and dental benefits and you also usually do not need to go through any underwriting. The insurance company will usually give you a cheaper rate than other simplified issue life policies because you have been in a group and so they assume that folks who are employed are usually healthier than those people who are unemployed.

 

Even though this is convenient, I’d encourage you to shop around and find out if you can find better rates about the open market. In many situations, people will discover much cheaper insurance if they go and purchase a life insurance policy on their own. That you will find to be underwritten to find the lower rates, which is an added inconvenience. On the other hand, almost every life insurance company now gives you the option to own your payments automatically deducted from your checking account so that you will do not have to worry about writing out premium checks every month or year.

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