Is Life Insurance From Your Employer Enough
Life insurance as an employee benefit is a valued benefit for millions of Canadian workers.
Employer life insurance is a form of group life insurance that’s offered to you and your coworkers. It’s typically a set dollar amount at smaller companies and a multiple of your salary at larger companies. The multiple is commonly one to three times your current salary.
The Benefits of Employer Life Insurance
It might cost you nothing (or very little). A big upside to life insurance from your employer is that it’s usually provided regardless of health. And if there is a cost, it usually only amounts to a few dollars a month.
You usually don’t have to take a medical exam. Life insurance from your employer is typically offered to every employee regardless of his or her health status. This can be a big plus if you have health conditions. A health condition can make it difficult to get a life insurance policy on your own.
It’s convenient. There’s no need to consider multiple quotes, schedule a medical exam, or do any other legwork. You usually only have to fill out a form or two and designate a beneficiary
The Downsides of Employer Life Insurance
It often falls short of how much coverage you really need. Most people need much more than one, two or even three times their annual salary in coverage to secure their family’s financial future. In fact, insurance professionals recommend having 10 to 15 times your annual income in coverage. This is especially true if you have dependents and/or debt. For this reason, it’s best to assume that life insurance from your employer probably isn’t nearly enough.
Your options are limited. You usually don’t have the range of policy options you’d have if you worked with Life Hub Corp.
Your employer can drop it at any time. You lose your coverage as soon as your company decides to cancel coverage. They control your coverage.
It’s tied to your employment status. You also automatically lose your coverage if you switch jobs, retire or quit or get fired. When this happens, you would need to go out and buy your own coverage. That can be more difficult as you get older or if you developed a health condition.
Exploring Options Beyond Employer Life Insurance
You might be able to convert your insurance. Conversion life insurance policies let you convert your life policy when you leave the company. The conversion usually lets you convert regardless of health within 30 days of termination. The policy choices are general limited to 1 to 3 policy types and the cost is set at a certain level due to this feature. Preferred rates are not offered which might be possible when your working with Life Hub Corp.
The potential downsides of employer life insurance often outweigh the advantages. Out of all the disadvantages, Potentially the biggest one is mistakenly believing that life insurance from your employer provides enough coverage for you and your loved ones.
Make sure you have all the coverage you really need by working with us. We can calculate how much coverage you really need. (You can also use our Life Insurance Needs Calculator to get a quick estimate.)
Once you know how much coverage you need, it’s time to compare costs. You can get your own quotes from our quoting calculator or talk to us to get hands-on service. Know that it may be worth it to pay more for your own portable, flexible policy that you own and control.
In closing, employer life insurance is a great starting point. But it almost never gives you enough protection. So take the time to figure how much coverage you really need and to consider getting your own policy.