Getting life insurance is paramount for the financial protection of your loved ones in the event of your death. It’s practical to obtain life insurance if you don’t have enough savings and if you have family members who are dependent on you.
Chances are, you’ve always wanted to get life insurance and haven’t really pursued signing up for one yet. However, it’s now possible to get one if you have a job or during open enrollment. Some employers provide free life insurance as a benefit called group life. However, is it worth it?
Below are the advantages and disadvantages of getting a group life insurance through your work.
Difference between basic and supplemental group life
When it comes to obtaining group life insurance through work, you have two options: basic group life and supplemental group life insurance. Keep on reading below:
- Basic group life: Some employers usually provide a small amount of life insurance coverage for free. Typical coverage amounts vary from $25,000 to $50,000 down to an employee’s annual salary. It makes sense to take advantage of this since it is given for free. All you have to do is to fill out the required form, name a beneficiary or beneficiaries, and submit it to your employer.
- Supplemental group life: Some employers allow employees to buy extra coverage. Typically, the plans are up to three or four times an employee’s annual salary. The higher amounts often require filling out an “evidence of insurability” health questionnaire.
Group life insurance: Advantages
There are some advantages that you can get out of buying supplemental group life insurance through your employer. Below are some of these:
- Convenience: Convenience is typically the main factor in getting coverage through work, especially for those who haven’t bought insurance yet.
- Price: Basic life insurance is usually offered for free by employers. If you opt to buy extra coverage, it can be much cheaper to get supplemental insurance through your work.
- Acceptance: If you have severe medical conditions, you may be eligible for a much better rate through work when compared to getting it by yourself.
Group life insurance through work: Disadvantages
There are also some major drawbacks when it comes to obtaining group life insurance through work. Below are some of these:
- Career shift: You may not be able to continue your life insurance coverage if you decide to shift to a different career. Even if you can convert your life insurance into individual insurance, the cost will possibly increase.
- Limited options: You may not be able to have a wide range of policy options when you buy life insurance through work. The basic group life insurance is usually what’s offered. If you want a more complex product, it will be best if you consult with a financial advisor. The bottom line is, you may not be able to buy as much coverage as you need through your work.
It’s best to take advantage of any free basic group life insurance offered by your employer. However, make sure to compare the cost of supplemental life insurance available through your work and what you can find in the market. You might want to buy an individual policy and supplement it with life insurance through your work.
That said, take note of the advantages and disadvantages mentioned above, and see whether or not a group life insurance through your work will fit your needs.
If you’re looking for an insurance broker in Henderson, NV to help you get life insurance, get in touch with us today to see how we can help!
