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Life insurance is part of the benefits package many employers offer their employees. This coverage can also be purchased independently. Buying life insurance through an employer can have both advantages and disadvantages for the policyholder.
Many employers offer a small amount of life insurance, known as basic group life, as a benefit to their employees. This coverage is free and guaranteed. You only need to sign up for it, or enrollment may be automatic. Typically, coverage under a basic group life insurance policy only amounts to $25,000, $50,000, or the employee’s annual salary rounded to the nearest $1,000. In many cases, employees have the option to purchase supplemental group life insurance, with coverage that could amount to three to four times their annual salary. There are several advantages to buying this type of life insurance:
Along with the advantages, there are certain disadvantages to tying your life insurance to your employer:
If you can buy life insurance independently at comparable or slightly higher rates than the supplemental coverage available through work, that is probably the better option because of its portability. On the other hand, if you have a medical condition and may not qualify for affordable rates individually, supplemental group life insurance may be the best way to go. Consult with our friendly agent for guidance on this crucial issue.
Filed Under: Life Insurance | Tagged With: Life Insurance