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Life and Health


By November 1, 2011No Comments

If you are expecting Life insurance to fully provide for your family’s financial security, then you should think beyond the Group Life insurance that may be provided by your employer. A group policy might give you a false sense of security in believing you have adequate coverage.

Although some employers might offer several times your regular salary in Life insurance benefits, you owe it to yourself to ask if this is enough. How long would this amount last given your current expenses and debts? There is also the question of providing for your children, and their higher educational needs. It is important to make the time and effort to calculate how much is enough to cover your family’s financial needs should the unthinkable happen. This is especially important if you are the sole wage earner for the family.

As a general rule, people should have seven to ten times their annual salary in Life insurance, particularly younger people with families to raise. Younger people need to be aware that now is the optimum time to purchase Life insurance; as their policy will cost much less than if they wait a few years.

If you are starting a new job or thinking about switching jobs, there is vital information about group life insurance benefits that you need to consider.

If you leave a job, the downside of most group policies is that you cannot take the coverage with you; it may or may not be portable. Even if the coverage is portable, the insurer will normally require conversion of your term policy to a higher priced Whole Life policy. Certainly, it is preferable to accept the high priced conversion policy rather than having no coverage at all.

Advantages of Group Life policies:

  • Employers provide policies, most often at no charge to you.
  • Policies can be used as a supplement to an Individual Life policy.
  • Most policies are guaranteed issue with no medical underwriting required.

Disadvantages of Group Life policies:

  • Group Term Life insurance has no cash value and cannot be borrowed against.
  • There is no flexibility or choice with regard to the terms of the policy.

When it comes to Life insurance, don’t leave your family in a precarious financial position. Take steps to make certain your coverage is more than a fraction of what is really needed.