The benefits package that comes with a full-time work at a reputable organization is one of its rewards. These advantages frequently come with life insurance coverage, which is fantastic. And everyone who is eligible for life insurance via their employer should do so without a doubt, as group life insurance, also known as employer-funded life insurance, has several benefits. These benefits consist of:
1. Simple eligibility.
Group life insurance enrollment frequently occurs automatically. Therefore, everyone is eligible as no medical examination is necessary. Therefore, individuals with prior medical issues, such as diabetes or a history of heart attack, can get life insurance via their employer and may do so at a lower cost than they could pay for an individual life insurance policy.
2. Cost savings
Employer-sponsored insurance plans typically provide life insurance at a discounted rate or even for free. You could even have the choice to purchase more coverage at a discount. Because group plans reduce the cost per person as the plan grows, costs are often lower for more individuals.
3. Practicality
Without any work on your side, you may simply enroll in a life insurance plan offered by your employer, and if a payment is necessary, it can be quickly withheld from your paycheck in a manner similar to how medical expenses are withheld.
These are all excellent benefits, but are they the only factors to take into account when choosing a life insurance policy? Naturally, the response is no.
First and foremost, life insurance must serve the intended function and satisfy your demands. And the main goal of life insurance is to provide for your dependents in the case of your passing. Group life insurance policies sometimes provide a default benefit of $25,000 or $50,000 or one or two times your yearly pay. While this amount of money may seem substantial, consider how long that would last your loved ones. When it ran out, what would they do?
1. You’ll lose your coverage if your employment status changes. The majority of the time, an employee cannot keep their insurance after they leave their work, regardless of whether the change was caused by being laid off, going from full-time to part-time status, or quitting the employer.
2. When you retire or reach a certain age, your coverage can expire. after they continue working past a certain age or after they retire, many people frequently lose their insurance coverage. When you most need insurance, this means losing it.
3. Your employer has the right to modify or end the insurance. Since the agreement is between your employer and the insurer, it may happen without your permission.
4. You have few choices. Your particular demands are not being met by this kind of coverage. Additionally, you might not be able to purchase the amount of protection you require, leaving you exposed.
A Separate Life Insurance Policy Is Important
For these reasons, in addition to any group life insurance you may have, you should get an individual life insurance policy that you directly own. Individual life insurance policies provide better benefits, stay in effect independent of your company or work status, and may be modified to suit your requirements and situation.
An individual life insurance policy will, most crucially, serve the reason for which you bought it—to make sure your dependents will still have the resources to maintain their way of life and house in the tragic event that you are no longer able to care for them.
