Group Life Insurance Through Employers: Is It Enough Coverage?

Most companies provide group life insurance as an employee perk. While convenient, relying solely on this workplace benefit may leave you underinsured and your loved ones inadequately protected. Here's why employer-provided coverage often falls short:

1. Insufficient Death Benefit To minimize costs, employers typically cap group policy death benefits at modest levels like 1-2 times your salary. However, experts recommend coverage equaling 10-12 times your income for full income replacement.

2. Coverage Ends When You Leave Group life insurance is not portable - you lose this benefit upon leaving your job. Converting to an individual policy is possible but often costlier than purchasing coverage independently while employed.

3. No Living Benefits Basic group term life lacks additional features like cash value accumulation or accelerated benefit riders found in personal permanent life policies. It solely provides a limited death benefit payout.

4. Expensive Supplemental Options While some employers allow supplemental coverage purchases, the added group rates tend to be higher than individual policies, especially for younger, healthier employees.

5. No Guarantees Employee benefits like group life are controlled by your employer and can be reduced or eliminated, leaving you unexpectedly uninsured during challenging times.

Over relying on workplace group life insurance exposes gaps that could severely impact your family's financial future if the unthinkable occurs. Securing individual coverage tailored to your permanent needs ensures sufficient protection.