Nearly 80% of employees believe that their Life insurance coverage is adequate. However, many working men and women who have Life insurance coverage haven’t taken the time to evaluate their needs since the start of their first policy. This leaves them and their families at risk of facing trouble in the event of premature death. Working women who have Life insurance are more likely to admit that they don’t know how much coverage they possess. They’re also more likely to purchase inadequate coverage. A good estimate for adequate Life insurance is five years of salary combined with the amount of all current debts. However, about half of all men and women purchase coverage that is equal to the amount of debt they have combined with three years of salary.
Gender Issues. Women and men have different preferences regarding their Life insurance coverage. More men than women are concerned about contributing to their surviving spouse’s living expenses. The main concern most women have is covering their final expenses. However, men and women who have children are equally interested in providing for them. The difference between having enough money to cover final expenses and providing for loved ones is significant. Policyholders are urged to study their policies in order to understand the terms thoroughly. It’s also important to keep beneficiary information current.
Matching Needs and Policy Features. Many individuals are unfamiliar with their Life insurance policy’s basic features. Studies show that several employees who say they have Term Life coverage think that it affords them financial protection. They also believe this financial protection will last for an unlimited amount of time. However, this isn’t true. Term Life insurance only provides coverage for the specific term outlined in the policy. It’s important to recognize that the key word in this type of coverage identifies it as a temporary policy. If the term ends and the policyholder doesn’t renew it, coverage ends. Most Term Life insurance policies last for periods of 10, 15 or 20 years. However, some Term Life policies offered by employers may last for the entire duration of employment. If an employee quits or is terminated, the policy is also terminated. At the end of the term, the coverage may be continued. However, it’s important to remember that continued coverage comes with a much higher premium.
Many employees are not leveraging Life insurance as well as they could be. In order to meet their needs, employees need to realize how valuable this coverage is in supplementing estate planning and retirement benefits. People must familiarize themselves with the Life insurance benefits offered by their employers. Some employers may offer living benefits, which usually include will preparation, beneficiary assistance and power of attorney preparation. Employers should never assume that what is offered at work is sufficient Life insurance coverage for an individual. It’s best for employers to communicate this fact with employees. They should also encourage employees to analyze their needs to determine how much coverage they need. Although many people think that getting the right amount of coverage is difficult, it is a fairly simple process. The best way for employers and employees to analyze their insurance needs is to contact an agent who is capable of providing a professional analysis.