Does your employer offer or help sponsor life insurance coverage for you and your family? If so, do not fall into the trap of purchasing all of your family’s life insurance coverage through work. While the guaranteed approval and low rates may seem like an attractive, no-hassle way of handling your coverage needs, a work policy could be setting you up for higher costs and insufficient benefits in the future.
Disadvantages of Work Policies
There are several disadvantages of employer life insurance policies, the most important of which is its lack of portability. Life insurance is designed to provide security and peace of mind no matter what life brings. With most employer-based life insurance plans, coverage is tethered to your status as an employee. Since most people change jobs multiple times throughout their careers, gaps in coverage are not only possible – they are likely. Should you leave your job or get laid off, coverage is typically terminated as well. In some cases, employees may be given the option to convert coverage to a personal policy, but the premiums are often significantly more. In addition, there is no guarantee a future employer will offer life insurance at all, which could prove problematic if you develop a health condition that later disqualifies you from private coverage.
Another major disadvantage of work-based life insurance is a lack of tailored coverage. Your individual insurance needs will vary depending on your age, the number of dependents you have, your long-term goals, and your income. Since most employer plans are one-size-fits-all, you may find that the benefits offered are not enough to protect your family against the unexpected. In fact, employer insurance is often only enough to replace one or two years of income – not the ten years or more, which are standard with a private plan.
Work Insurance is Bonus Insurance
Some employers pay the full cost of life insurance as part of an employee benefits package. In these cases, it makes sense to accept the coverage, but treat it like a bonus. If your coverage were to end suddenly, it could leave your family unprotected. Instead, purchase a private life insurance policy for yourself with enough benefits to leave your dependents adequately protected against potential expenses, such as:
- Funeral and burial costs
- Medical bills
- Lost income
- Retirement
- Planned expenses (College, Vacations)
- Unplanned expenses (Repairs, Sickness)
- And more
Talk to an Agent about Your Life Insurance Needs
Remember, the easy way is not always the best way. Instead of turning to an employer to protect your family or trying to navigate your life insurance needs on your own, take the time to talk to an agent instead. The team at Imes Associates can help you calculate the benefits and type of life insurance policy that’s right for you and your family, ensuring that your dependents are fully protected regardless of your job status. Call Imes Insurance today for more information or to get your free life insurance quote. We look forward to serving you soon.
