Twin City Underwriters

Life Insurance from Employers: Is it Sufficient?

June 23, 2022 | Tom Peterson

Many people wonder if life insurance provided by employers offers sufficient coverage. If you were to pass unexpectantly, do you know if the policy benefit will cover your income and the expenses your family will be left with? Will they have the funds to cover funeral costs?

In 2021, a study from the National Funeral Directors Association shows the median cost of an adult funeral with viewing and burial was $7,848 (up 6.6% from 2016).

Here are the things you should consider when deciding if your employer’s group life insurance coverage is sufficient for you and your family, or if you will need to supplement with additional policies.

Read More: How to Increase Life Insurance Coverage

What to Consider When Evaluating Life Insurance from Employers

  • Income: Is your spouse or family dependent upon your income in order to financially stay afloat?
  • Mortgage: Do you have a mortgage you would want to be paid off in the event of your passing?
  • Dependents: Do you have children who depend on you?
  • Education: Do you want to leave money for your dependents’ or grandchildren’s education?

Typically, employers will contribute or pay the premium in full to be covered under their Group Life Insurance policy. The employer will often receive lower premium rates when covering employees as a group. You have the benefit of enrolling with no health questions asked. In general, the amount of death benefit assigned to you is the approximate amount of your annual salary. As such, it’s important to ask whether the amount your employer offers to you will cover the expenses you will leave behind.

Questions to Ask When Evaluating Employer-Provided Life Insurance:

  • Will the plan come with me if I end my employment?
  • Will the terms end or change, and become undesirable to my needs?
  • Is the coverage guaranteed through my employment?
  • Should I supplement with my own life insurance policy, in case of these things?

Read More: How Can Preexisting Conditions Affect Life Insurance Approval?

It is important to be aware that leaving your employer may end your coverage on their policy. If your health declines over time, will you face hurdles when attempting to enroll in an individual policy at your current age and health status?

There are many things to consider when deciding if the life insurance coverage you have is sufficient. Working with an experienced life insurance agent to review and determine if additional coverage is needed can offer you peace of mind knowing your loved ones are protected. Have your life insurance questions answered. Call Twin City Underwriters to review your options today!