Group Life Insurance Is a Start but Not a Solution
Open enrollment season is nearly upon us. Soon, employees across the country will log in to review their workplace benefits for the upcoming year. Health insurance. Dental. Vision. Retirement plans. And, of course, life insurance.
Most people glance at the life insurance section, see that their employer provides it, and move on without much thought.
The truth is that if you only have life insurance through your employer, you are likely not as protected as you think.
Group Life Insurance Is a Start but Not a Solution
Employer-provided life insurance, often called group life, is an easy benefit. It is typically free up to a set limit, requires no medical exam, and covers every employee under one policy. It is a great start, but it is not a complete plan.
According to the Life Insurance Research and Marketing Association, one in four Americans with life insurance only have coverage through work. The problem is that group life policies are limited, not only in how much they pay, but also in what they allow you to do.
The Coverage Gap
Most group life policies cover one to two times your annual salary. That might sound like a lot, but experts recommend coverage closer to ten times your income to ensure your family can pay off debt, maintain their lifestyle, and plan for the future.
While some employers offer supplemental coverage to increase your benefit, those premiums can climb as you age. The policy may still not travel with you if you change jobs.
You Cannot Take It With You
Your workplace policy is tied to your employment. If you leave, retire, or your company closes, that coverage ends.
Some plans allow conversion to an individual policy, but the cost often increases significantly. Owning a personal life insurance policy gives you portability and peace of mind. Your policy will stay with you no matter where you work.
No Living Benefits or Customization
Most group policies are term life, which means they last a set number of years and pay only if you pass away during that time. They do not offer the kind of flexibility that allows you to protect yourself while you are alive.
With your own policy, you can add riders that create real-life benefits, such as:
Accelerated death benefits if you are diagnosed with a terminal illness.
Long-term care access for assisted living or in-home support.
Waiver of premium if you become disabled.
Children’s coverage that can grow into their own permanent plan later.
No Cash Value or Growth
Group life insurance does not build cash value or earn dividends. A permanent policy, such as whole life, can grow over time. It becomes a living asset that you can borrow from, use to pay premiums, or access during tough times.
That kind of flexibility is something a workplace plan cannot offer.
The Smart Move
The best approach is to treat your work policy as a bonus, not your foundation. You can keep the free coverage from your employer but add your own individual policy. This gives you something portable, customizable, and designed to fit your life and long-term goals.
When it comes to protecting your family, relying only on what your employer provides is like renting your protection instead of owning it.
If you are ready to explore what owning your policy looks like, visit JamesTanner.us/life to learn how to get started.
