It’s an everyday answer we hear when we interview clients about owning life insurance. They commonly reply by saying that they have life insurance on the job. Even life insurance in the workplace could be a good supplement to other policies you have outside of work, there are some significant risks involved with only depending on life insurance coverage supplied to you by your employer.
5 Risks of Relying on Life Insurance on the Job
Risk #1: Life Insurance Coverage Choices May Not Be Enough To Satisfy Your Needs
The basic menu of life insurance selections presented by your employer may not serve to take care of your obligations in the event of the unthinkable. Don’t just settle for the small menu of choices that your employer presents. Checking out life insurance protection options outside of your workplace offers you a wider sense of what is available. Don’t restrict yourself to just a few options. Each and every scenario is different. Essentially, you want to get the policy that is best for you.
Risk #2: Health Issues Can Make People Uninsurable
If you lose your job after many years of counting only on the life insurance you hold at work, you can potentially have health issues, and these health issues may get in the way of your possibility to acquire new life insurance coverage. Take note, you don’t have the right to get life insurance.
Typically, you are going to do have to go through a medical exam and underwriting to qualify to acquire any life insurance coverage with any sizeable death benefit. If you do identify a life insurance policy that does not ask for a medical exam, be prepped to pay much higher premiums for this benefit. Additionally, you’ll soon realize that the coverage amounts offered are going to be much less significant than what you may really need.
When Carla’s supervisor position was eliminated after a corporate merger, she discovered herself without a job and without insurance. Carla admits, “Looking back, I had an impractical sense of feeling financially intelligent by exclusively depending on life insurance through my employer. In the event that I had any thought this was going to take place, I would have certainly never addressed my insurance decisions this way. I kick myself everyday since now I’m unable to qualify for new life insurance policy because of my diabetes diagnosis.”.
Risk #3: It’s Easy To Get Dependent On Employee Benefits
Employers furnish employee benefits to enhance employee loyalty and to keep employees for longer periods of time. It’s no secret that the expenditure of supplying benefits is far less than substantial employee turnover and new employee training costs. This is wise on the employers part, but it can keep an employee from having the courage to make the most of other opportunities because they are afraid of giving up their benefits.
Risk #4: Employment Conditions Change
The employer providing benefits to you today may not inevitably be your employer tomorrow. Job opportunities do at times end suddenly, and this can indicate that your life insurance and other insurance benefits can end suddenly as well, leaving you without any insurance coverage at all. If you have financial obligations and loved ones who are depending on you and your income, getting a lapse of life insurance coverage is simply just one more detail to keep you up at nighttime, and it situates your family’s financial security at an avoidable risk.
Risk #5: Company Life Insurance Can Be Much More Pricey
While it may be more hassle-free to make speedy decisions about your life insurance program while hanging out in your company’s HR department, creating the time to consult with a financial services professional beyond your workplace will often give you more life insurance coverage for your money. In other words, it is well worth your time to compare the cost of life insurance at work with what you can purchase in your local market.
Are you beginning to understand that possessing life insurance solely through your employer is not automatically in your best interest? Contact us to find out if your life insurance on the job is sufficient for your needs. We are glad to review your life insurance needs and give you with a professional’s guidance that is going to serve you in the long term.