One of the most common responses I get from clients when asked if they have an individual life insurance policy is that they have life insurance through work and they are not interested in an individual policy. While it makes sense to take advantage of any free or reasonably priced employer offered life insurance benefit, it is important to consider the disadvantages of not having a life insurance policy that is owned by you.
Not enough coverage
While most employer provided life insurance may be easily accessible, the coverage offered is usually too low to be of any substantial benefit in the event of a loss. For the same cost in premiums, an individual life insurance policy would offer 7 to 10 times the benefit amount of an employer provided life insurance policy. If a surviving spouse or other family member would be financially burdened by a premature death, then it makes sense to purchase supplemental life insurance coverage in addition to your employer offered coverage to make certain your loved ones can carry on financially, even without you.
Changing job situation can leave you without coverage
You never want gaps in life insurance coverage since you cannot predict when you will need it. No one knows when they will die so it is important not to have breaks in coverage. In most cases with an employer owned life insurance policy, if you switch jobs, get fired, or retire, you lose your coverage. This is also the case if you go from full time to part time. While some policies will allow you to convert your employer provided policy when your relationship with the employer changes, the options for conversion can be very limited and prohibitively expensive, especially if you have developed some sort of health condition that changes your insurability rating.
What to do…
A good strategy in most cases is to supplement or replace your employer provided life insurance with an individual life insurance policy which you own and control. Ultimately, the most affordable and sensible solution is to buy the most individually owned life insurance you can afford at the youngest age, since as you age, the chance of getting an illness goes up, and with age and illness comes more expensive premiums.
Reach out to me directly and I will guide you through the process of choosing an individual life insurance policy that fits your needs and protects the ones that matter.