Employer-sponsored life insurance is a form of group life insurance that is offered to employees by their employers. It’s usually a set dollar amount at smaller companies and a multiple of your salary at larger businesses.
The Benefits of Employer Life Insurance
It costs you nothing or very little. A significant upside to life insurance from your employer is that it sometimes free, and if there is a cost, it usually is only a few dollars a month.
You don’t need a medical exam. Life insurance from your employer is usually offered to every employee regardless of their health status. This is a huge plus if you have any health conditions. A health condition can make it challenging to get a cheap life insurance policy on your own.
It’s convenient. There’s no need to consider multiple quotes or do any legwork. You typically only have to fill out a form or two and choose a beneficiary.
The Downsides of Group Life Insurance
Doesn’t cover much of what you need. Most people need more than one or two times their salary in coverage to secure their family’s financial future. This is especially true if you have dependents or debt. For this reason, it’s best to assume that life insurance from your employer probably isn’t nearly enough.
Supplemental plans can be more expensive than getting your own policy. You may have the option to buy additional coverage through your employer-based policy. While this can be a convenient option, it may cost more than purchasing your own life insurance policy through an insurance broker.
Your options are limited. You normally don’t have the array of policy options you’d have if you worked with an insurance broker.
Your employer can withdraw it at any time. You will lose your coverage as soon as your company decides to drop the insurance policy.
It’s tied to your job. You will automatically lose your coverage if you retire, switch careers, or become laid off. When this happens, you would need to go out and purchase your own policy. That can be more challenging as you get older or if you developed a health condition.
The potential downsides of employer-sponsored life insurance often surpass the advantages. Employer life insurance is a great starting point, but it rarely gives you enough protection. So take the time to figure out how much coverage you really need and consider getting your own policy.
Cosmo Insurance Agency is a full-service independent insurance agency based in Hackensack (Bergen County) and Lakewood (Ocean County), New Jersey that offers an all-encompassing range of insurance options for both individuals and businesses. Cosmo keeps its promise to assure an efficient and creative approach to the services we offer. Each of our clients experience a personalized and long-term relationship with us. Our New Jersey based team of health brokers guides our clients in helping them choose the most cost-effective options. By incorporating our knowledge of the insurance guidelines for healthcare, employee benefits, life insurance, self-insurance, dental, disability, and long term care insurance, we keep our clients up-to-date with affordable plans that cover all their specific insurance needs.
