FREQUENTLY ASKED QUESTIONS

Many employers offer life insurance plans to their employees as an added employee benefit. While these plans are nice to have, the coverage offered by them might not be enough. Often times, these plans are very basic and will not offer enough protection for your family and loved ones in the unlikely event you die. Because of this, you might want to start thinking about buying supplemental life insurance on top of your employee-sponsored plan.

How employer sponsored insurance plans work

Typically, employers offer their employee a term life policy for free. These life insurance policies usually require no proof of insurability. This means that you will not have to pass a medical evaluation in order to be insured. In addition, all employees of the company will usually be granted the same life insurance rates, as the employer typically buys a group policy.

Most experts agree that if your employer offers some sort of free life insurance, it’s best to take it. The reason for this is that the rates are competitive, and pre-existing medical conditions are usually not considered. This kind of life insurance is most likely unattainable for individuals on the open market.

Things to consider with employer sponsored life insurance plans

While this type of life insurance is recommended by most, there are some instances in which you may need to think twice about signing up for life insurance through work.   Here are some other things to consider:

Is the life insurance plan portable?

Do you have the option of taking the life insurance policy with you if you seek employment elsewhere? If so, will your policy remain the same or will you have to go through underwriting and a medical exam in order to keep your life insurance policy in-force? If this is the case, you might want to look elsewhere, especially if you have pre-existing medical conditions or you are “getting up there” in age. Remember, life insurance for the old and/or unhealthy can be quite expensive.

Who is responsible to pay the premiums?

Either you or your employer will be responsible for making premium payments for your life insurance policy. If you are responsible to foot the bill, how much does it cost? Will your premiums remain the same throughout the course of the policy or will they increase annually? If it’s too expensive, you might want to seek a life insurance policy elsewhere.

What does the death benefit look like?

Is it a fixed amount or is it a multiple of your annual salary? If you get promoted over time will your death benefit increase or remain the same? If this death benefit does not appear to be adequate to support your family in the event you die, a different life insurance policy might be worth looking in to.

Is it enough coverage?

While young and single people in the work force may find their employer sponsored plan to be enough, employees with dependents may find it to be lacking. Nearly all group plans allow their employees to be additional coverage (through the employer plan), but even THAT might not be enough. Fortunately, buying a multiple life insurance policies is not only legal, but also makes great financial sense in some cases. If your employer’s coverage is not enough, buying another policy could be a good idea.

What Next?

If you have more questions about your employer sponsored life insurance plan, it might be a good idea to consult with your boss or human resources manager. You might want to employ a life insurance agent or financial adviser to get a more professional opinion on the matter. If you decide that your employer sponsored plan is not enough and would like to purchase supplemental life insurance, please start by comparing life insurance rates for free at Life Ant.