Chances are, you've come across the saying “supplemental life insurance” on your employer's open enrollment, or when you first joined a new company. It sounds simple enough, when it comes to exactly what the words mean. But it's a little more complicated than that, and that's why we're here that will help you figure out precisely what supplemental life insurance is, what the distinction between supplemental life insurance and basic life insurance coverage is, and more importantly, whether you need it.
So let's move on here: What's supplemental life insurance and who needs it? Supplemental life insurance may be the coverage you can purchase through your operate in addition to the audience life insurance coverage they may already offer like a benefit. A supplemental policy is generally taken care of from your paycheck. While group life insurance coverage belongs to your benefits package from your employer and for that reason is generally a free benefit or has affordable premiums, that isn't always the case with supplemental life insurance. Whether supplemental life insurance coverage is a good value will depend on the merchandise and your personal age, health and the amount of coverage you're seeking.
To assist you to navigate this coverage option, we've outlined a few key questions you should ask yourself, and provided answers that can help show you toward making the right choice for the life insurance coverage needs.
Do you get employer-provided life insurance coverage?
Any thought on whether or not to buy a life insurance plan must start with first revisiting just how much coverage you have. According to the Department at work, an enormous majority of workers have access to a life insurance policy through their employer. In the event that majority includes you, review what coverage amount is currently provided to you. (If you're unemployed, work as a contractor or freelancer, or take part in the gig economy, however, chances are you have no employer-provided life insurance policy.)
As we've noted before, however, employer-sponsored insurance coverage is often insufficient, specifically if you have children or possess a home. Employer-provided coverage is a nice benefit, to be sure – it's typically free, or nearly so – but your needs might require additional life insurance coverage. Group life insurance usually covers one or two times your annual salary, enough to pay for, say, the cost of a funeral along with other sudden expenses, but likely not enough to accomplish payments on the mortgage and send your children to school and – well, you get the idea. This is where supplemental life insurance is available in. It's essentially additional coverage you buy using your employer, in an additional cost that is deducted using your paycheck.
Have you compared life insurance rates?
Getting supplemental coverage cost you more than it might investing in a life insurance policy on view market. What? That will depend on the selection of factors, as well as your age, health, coverage amount and much more. (More about that in a minute.) It will also depend on what sort of coverage you receive, and it's worth noting here that many employer-offered supplemental life insurance plans are restricted in some manner.
You may, for example, see something called accidental / accident death and dismemberment (AD&D) insurance, which is pretty much what it really sounds like. If you die or are hurt within an accident throughout the coverage term, your loved ones is going to be paid a death benefit. Should you die from other causes (including natural ones), however, you're not covered under accidental death insurance. Another offering might be burial insurance (or final expense insurance) policy, which will invest in your funeral costs – not really a bit – but little else.
Compare these kinds of policies to term life insurance, which offers both more coverage (when it comes to dollars) and much more flexibility (in terms of how your beneficiary gets and uses those dollars). For example, if you purchase, a $500,000 policy, that can be used toward funeral expenses (often in the $7,000 to $10,000 range), plus day care, education, housing costs, and making up for lost income in countless other ways. And you will be able to get coverage for less than what you spend monthly on coffee. (We all know it is a cliche, but it is true.)
With that in mind, if you are considering buying supplemental life insurance, it's important to compare these quotes with other products on the open market. Most digital life insurance providers enables you to easily get free quotes for coverage. We'll jump start the study for you personally here:
Quotes for term life insurance insurance
How's your wellbeing?
Depending on the kind of policy, supplemental life insurance can be a sensible choice for those who may have difficulty getting coverage beyond work. Let's say you're older, you're a smoker, you're out of shape, or else you have high-risk hobbies (like flying planes or hang gliding). With individual coverage that you buy beyond work, an existence insurance provider will consider all those factors and price your coverage accordingly.
If you're younger and healthier, you're going to get the very best rates on insurance coverage. Let's imagine you're in your 30s and in excellent health: you would like the insurer to cost your coverage based on your wellbeing. Therefore if that's you, make certain whatever policy you purchase (supplemental or otherwise) is priced based on your age and health. And don't forget: always price compare.
Do you need portable coverage (and what's that, anyway?)
One more aspect of supplemental life insurance: If you decide to purchase it, make sure to check whether you can take the policy with you if you leave or lose your job.
If you would like life insurance coverage in place for a particular period of time (until your kids are grown, perhaps; or until your mortgage pays off), regardless of your employment situation, it is something to consider. However, if you buy your personal term life insurance policy, it goes where you go, and keeps protecting your loved ones even if you change employers (and then spend the money for premiums).
So, must i purchase a group supplemental life insurance policy?
To put it simply, supplemental life insurance premiums might be greater than what you'd purchase exactly the same coverage on the open market. So make sure you shop around online before buying an insurance policy.
Some kind of insurance coverage is better than nothing, but any prudent shopper wants to make sure they get the best value for their dollar. If you're young and healthy, term life insurance should be an inexpensive way to help financially protect your loved ones. To find out how affordable, get a quote for coverage at Haven Life.