When planning the financial future for your family, how do you know that the life insurance plan you received at work will be enough? Many times the answer is that is won’t. The group policy you received may make you feel like you have the security for your family you are looking for, but the reality is that many times it falls short of the expectations you have for a life insurance policy.
The benefits to this type of life insurance are obvious; they are at little or no cost, there is no medical exam required, and the application is typically only a mere check mark on an HR form that you had to fill out anyway.
So what are the drawbacks and why would you even consider any other policies?
1. You can’t take it with you.
The major drawback to this type of life insurance policy is the portability factor. Simply put, most times when you no longer work at your job you cease to have coverage. These types of products are not designed to be able to take with you after you leave your job. If the policy does allow for it to be taken once you leave your job, typically the cost of the insurance will be much higher than what you pay while with your employer. When you signed up for your life insurance policy through your work, you were given a group rate. However, once you leave you are no longer part of that group, and the insurance company will no longer price your policy as such.
2. Is it enough?
The typical life insurance policy you get through work is going to range between $50,000 and 1.5 times your annual salary. But income is just part of the equation when considering how much life insurance coverage you need. Other factors include how much debt you carry, if you have a mortgage on your home, and if you have children that plan on going to college.
If you carry $30,000 in debt, have a $250,000 mortgage, and have two kids that are some day going to go to college, is a life insurance policy at 1.5 times your salary really going to be enough?
A life insurance policy through work can be a great thing to have, especially when it is free. But don’t make it your only policy. Life insurance is cheapest when you are young, and increases on average by 5% every year, so obtain a policy on your own, and use a worksite insurance policy as a supplement to your own life insurance policy.
Call now to see if you can save money on your insurance by speaking to a professional independent insurance agent at Journey Insurance.
Let us sift through the hundreds of insurance programs to find you the most competitive rates available. Let us do the paperwork while you spend your time doing something you actually enjoy!
Journey Insurance Agency * Irvine, California * 888.323.7480
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