These days, many companies offer group life insurance as part of an employee’s benefits package. Group life insurance has some great benefits. For one, the employee’s contribution is usually relatively low and in some cases, the company will incur the full cost. For another, acceptance is all but a given in most cases, and a health exam or health questionnaire is typically not required. And thirdly, there’s a major convenience factor, employees will usually fill out one set of forms as part of their onboarding or open enrollment and human resources will do the rest. That said, there are cases when you may want more coverage than your employer offers. Here are some times when you might want to stay on your employer’s group life insurance, but also purchase additional coverage.
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Most group life insurance policies only provide a death benefit while the employee is covered. This means that beneficiaries will only receive money if the insured individual dies while the policy is active. People in search of additional perks, such as the cash value and guaranteed death benefit, may choose to get a permanent policy, like whole life insurance. Whole life insurance provides fixed premiums, lifelong coverage, and the potential for policyholders to receive dividends.
If you want additional coverage
While group life insurance can be cost-effective, the coverage amounts can sometimes be on the lower end. If you have dependents, a big debt like a mortgage, or are paying for a child’s college education, you may want additional coverage. If you think you’ll need more coverage than your employer provides, you may want to look into getting an individual policy that meets your needs as well.
If you want continuing coverage
Another reason why you might want coverage in addition to your group life insurance is that it typically goes away after you leave your job. This means that if you get a new job, are laid off, retire, or leave your job for any other reason, you will no longer be covered.
There’s also no guarantee that your next job will offer the same benefits and, while in some cases you may be able to transfer your existing policy, this is not the norm. Just like all the other benefits of your job, group life insurance is subject to your employment and your company’s policies. For this reason, many people choose to get an individual life insurance policy in addition to their group coverage.
