Such an easy answer, Yes and No. Life Insurance through your employer can be a great way to secure life insurance at a relatively low cost. Some employers will offer a small amount free of charge. These amounts can range from $10,000 to $50,000 and are part of a Group Life policy. As an employee there is no reason not to take advantage of this benefit. None, TAKE IT!!!
The next Life Insurance option many employees have through their employer would be Supplemental Group Life Insurance. This allows you to purchase life insurance up to and above your salary level. Some offer the ability to purchase 3 to 4 times the amount of your salary. This is another inexpensive way to purchase life insurance.
So now you are saying to yourself, these are great. I can take care of my life insurance needs simply through my employer.
No So Fast…..
While these are inexpensive options, the MAJOR DRAW BACK is that if you ever leave your current employer you cannot take these policies with you.
A 2019 Bureau of Labor Statistics survey showed the average number of jobs one has in a lifetime is 12. That is a lot of starting and stopping of life insurance policies. Plus, each year that goes by the more expensive life insurance gets.
The Hybrid Approach
At Farris Insurance Advisors, we recommend a hybrid approach by combining the life insurance you get through work with a life insurance policy outside of work. This way if you were to lose your job for any unforeseen circumstances, you would already have life insurance in place. In addition if you were to switch jobs and your new employer did not offer the same benefits as the first, you would also already have life insurance in place. In most cases the life insurance you have through your employer is not enough to meet your overall life insurance needs.
The Magic Rider
Another recommendation is to add the Guaranteed Insurability Option Rider (GIO) to your life insurance policy outside of work. For those that are in their 20s and 30s this allows you to purchase additional coverage without showing evidence of insurability. At certain points of the policy you can increase your coverage by an additional $100,000, or even $250,000 up to a lifetime cap of a $1,000,000 of additional coverage.
The Guaranteed Insurability Option Rider is great for young couples that can grow with life’s big events. These events might include the purchase of a new home or even the start of a family.
You Need Us
Contact us today at Farris Insurance Advisors so that we can help you assess your overall life insurance needs and put together a plan to meet those needs.