Is My Employer Provided Life Insurance Enough? If Not, Why?
Your Employer Provided Life Insurance... It may not be enough
March 15, 2019
What do you know about your employer provided life insurance? Chances are, not a lot. Most people understand that they have life insurance through their company, but they don’t fully understand the coverage of the policy.
They usually think that what they have is enough or that they don’t really need to worry about it right now. The fact is that you may have a gap in your coverage that can hurt your family down the road. Read on to find out if your life insurance policy through your employer is enough to protect your family and other issues you may encounter. Outline Your Situation Your personal situation will help you decide if employer provided insurance is enough for you or if you’d be better off seeking individual or supplemental policies. The needs of a 23 year old fresh out of college and a 35-year-old married with two kids are quite different. Same with a 55-year-old focused on retirement. The bottom line, is that you have to list your responsibilities and what happens to them if you were to die soon. Your mortgage, student loan payments and education costs for your kids will all have to be made in your absence. You want to be sure your life insurance policy is enough to cover everything.
Is Your Employer Provided Coverage Enough? Employer provided life insurance typically covers you for 1-2x your annual salary. If you work for a smaller company, expect to see a flat rate of approximately $50,000. You then need to ask yourself if you want your family to carry any remaining financial burdens. What if You Lose Your Job? One question that’s often asked by people who have their life insurance policies through work is “What happens to the policy if I lose my job?” The economy is still rolling along, but job losses do happen. You could lose your policy, just like you would lose a steady paycheck. You would have the option to pay the entire premium yourself, but that could be financially out of reach.
Check to See if Your Spouse is Covered Under most health insurance plans, you can enroll your entire family under your plan. It’s not always the case with life insurance. In many cases, spouses aren’t covered, and if they are, the coverage isn’t very good. You’d hate to even think about it, but you must consider what would happen if your spouse dies unexpectedly. Would your hours get cut back because you need to care for the kids? How would your family adapt to being a one-income household? These are the things that need to be considered to ensure you have adequate life insurance coverage.
Your Life Insurance Should Evolve with Your Needs Life insurance is a necessary tool to have if you want financial security for your family. Employer provided insurance is a wonderful benefit to have, but you need to make sure that your needs are completely covered. Also, keep in mind that your needs will change as you get older. Your life insurance policy should change, too. You can always rely on an independent agent to make sure you get the policy you need. We will review your employer-provided policy and give you a free quote. Click the button below to get in touch with us today.