You signed up for life insurance through your job. Check! But here’s something you need to know: Employer life insurance likely isn’t enough coverage.
Most of us opt for employer life insurance and think we have handled what we need to handle in terms of our loved ones having enough money should the worst happen. And in some cases, it is likely adequate.
However, employer life insurance sometimes is just the beginning of what your loved ones will need if you die, so it’s a good idea to take stock of what you have, what they’ll need and plan accordingly.
Typically, employer life insurance is based on a multiplier of your salary. Sometimes, it is a set dollar amount.
The upside of it is, generally it doesn’t cost you much – if anything. You probably don’t have to take a medical examination or do your own research on the benefits, costs and qualifiers. You sign up, choose a beneficiary and you are done.
But it often is simply not enough money for your loved ones if you pass away. The truth is, most families will need more than a few years’ of the breadwinner’s salary to survive financially. It is actually recommended to have 10 times the breadwinner’s annual salary in life insurance – which could be a hefty sum that your employer will not offer as a benefit.
If you have dependents, a spouse that cannot or does not work or debts, you might need more life insurance than the average.
Another downfall is, your employer can – at any time – choose to drop the coverage, so you could be out of luck. If you lose your job or quit, you will also lose your coverage. And also, you don’t have any options when it comes to choosing a policy – and one-size-fits-most may not work for you.
A good insurance agent can help you figure out the amount of coverage you need and get you the best policy – at the best rate.
It’s always good to take a benefit that is low- or no-cost from your employer; but keep in mind, you likely need to work with an insurance agent to make sure you and your family are doing all you can to prepare for the future (whatever it brings!).
At Crumrine Financial Services, we can explain how much life insurance you need and identify the right policy for you. Request a quote today!