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Does Your Employer’s Life Insurance Offer Enough Coverage?

Family walking on the beach.

If your employer provides life insurance, you might think you have that necessity covered. After all, life insurance is life insurance…Right?

Actually, no. Life insurance policies vary greatly in their terms and many people find out much too late that an employer-provided life insurance just doesn’t offer enough coverage. The last thing you want is for your family to make this unfortunate discovery after your passing, so take these steps to evaluate your company’s life insurance policy now.

Company life insurance isn’t a guarantee.

Sometimes employers drop life insurance benefits, due to budget cuts. Or, if you leave your job, you might find that your life insurance policy is not portable. If you develop a medical condition in the future, it can be difficult to secure a policy from that point onward, so the time to shop for life insurance is now.

Is your company’s life insurance policy competitive?

You might be able to opt for additional insurance coverage, beyond the basic policy offered by your employer. But you shouldn’t do this without first shopping around. You might be able to find a life insurance policy with a more affordable premium.

Read the fine print.

If you do decide to look for an additional life insurance policy, be sure to read all of the exclusions. If your occupation is a high-risk one, some life insurance policies might not pay benefits if you pass away for certain reasons. For example, a commercial pilot should not select a policy that won’t pay benefits if he dies in a plane crash.

How much insurance do you have? How much do you need?

The point of life insurance is to replace your income in the event of your death, so that your dependents don’t suffer financial repercussions of your passing. Aside from your funeral and burial expenses, you should consider how your spouse or children would pay the mortgage, cover living expenses, or go to college. Without your income, they will have trouble covering even the most basic expenses.

Many employer-provided life insurance policies offer just enough benefits to cover burial expenses, with little left over to help your family in their time of need. Meet with us to perform a needs analysis, and we can help you decide if your company’s life insurance policy offers enough coverage to protect your family.