Employer Provided: Basic Group & Supplemental

As mentioned, basic group policies are typically offered free through your employer. Coverage may vary and the amounts range from $25,000 to $50,000 or based on your annual salary and rounded to the nearest $1,000. Your employer may also offer a supplemental coverage which allows you to choose one to four times your annual salary. If you do opt-in for employer-provided supplemental, most likely you’ll need to fill out a health questionnaire. Remember, the rates for your supplemental coverage through your employer are not locked in. Your rates will increase annually commensurate with you age.  Supplemental life insurance offered through your employer may not cover all your needs.

Workplace culture has changed dramatically over the years and the likelihood that you will retire with a company you were hired to work for directly after college is highly improbable. This means that if you move, quit, are let go, or fired, your life insurance policy terminates unless you can roll that group policy into an individual policy. Converting your company promoted group policy into an individual policy means your rates will increase, sometimes dramatically, depending on the length of your employment and your age. Keep in mind, as you get older, acquiring a new life insurance policy gets much more expensive. Also, if your health diminishes or you experience any type of medical condition, procuring a new life insurance policy means you will absolutely see a major rise in premiums and finding coverage might prove impossible.

Essentially, an employer-sponsored supplemental policy is not a standard policy but certainly more than basic life.  However, the most supplemental life insurance you could buy through your group plan would still be significantly less than an individual policy through a private carrier.

Private Supplemental

Before we delve into private supplemental policies, let’s be very clear that basic life insurance should always be accepted and leveraged as a platform for understanding how much your family would need to maintain financial stability and comfortability in the years to come. Private supplemental should be incorporated into your overarching life insurance holdings. Private policies allows you to customize a supplemental policy to your specific needs. Once you determine your needs, your private supplemental rate is locked in for the duration of the policy. Also, your policy will not be cancelled upon termination of employment.  

Group coverage offers life insurance to clients they know little or nothing about. They are playing the odds and providing as little insurance for as much as they can. If you’re in good health, if you’re young, or if you’re not predisposed to certain illnesses, a private supplemental insurance company will view that as a very favorable client.

Supplemental life from an individual provider can help with:

·       Burial Insurance: This covers burial expenses and the funeral.

·       Accidental Death & Personal Loss: Your dependents or those you’ve chosen as beneficiaries will receive a certain amount of money every month, depending on the coverage you’ve selected, for a specific length of time if you experience any of the following: You suffer a paralysis, you remain in a coma 30 days following an accident, or you lose your ability to speak or hear.

·       Mortgage Life: If you finish paying off your mortgage, this policy will expire. However, in the event of death, this coverage will pay off the reminder of your mortgage.

·       Health-Specific Insurance: If you die of a specific disease to which you are prone or predisposed, you can get this coverage that will pay your beneficiaries a death benefit. This coverage can also be used to cover medical expenses so more of your standard policy can be used for you beneficiary’s day to day and maintain their lifestyle.

·       Spouse or Domestic Partner: This coverage can augment your loved one’s policy with additional coverage.

·       Accidental Death and Dismemberment (AD&D): If you suffer paralysis, loss of a limb, eyesight, hearing or your life, due to a covered accident, this policy pays out.

Remember, once you sign up for private supplemental policy, you will not see an increase in premiums and the longevity of your policy is not dependent upon a employer.

How Much Life Insurance Do You Need?

If you had enough life insurance to buy every family member a new house, you could sleep easy. However, you should sleep easy if you know that your life and particularly the private supplemental life insurance policies you carry will leave your family debt-free, your house paid off, your funeral expenses covered, and enough to pay for foreseeable expenses like college, moderate sustainability of lifestyle for your family in the near future and ideally for the long-term. You want your family comfortable and you don’t want to pay through the nose on premiums, particularly if you’re in good health and see a long road ahead. You also don’t want the carpet pulled out from under you when you change jobs or find your employment terminated. Private supplemental mitigates that possibility.

If you have any questions about the supplemental life insurance policy that might be right for you, call Leap Life’s life insurance specialists at (844) 755-5327.