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Why Life Insurance Through Work Isn’t Enough

life insurance

It’s easy to believe that the group life insurance offered through your employer is sufficient coverage for you and your family. After all, what’s good for the goose is good for the gander, right? Well, not necessarily.

While group life insurance is generally affordable and convenient, it has its shortcomings. Relying solely on your life insurance through work could mean there isn’t enough to support your family’s needs.

Have insurance questions? Listen to Episode 3 of our podcast, Merging Into Life: Insurance 101.


How Group Life Insurance Limits Your Coverage

Employee-provided life insurance only offers a fixed amount of coverage for a specified period of time. The coverage amount is often a multiple of your salary, but doesn’t consider factors such as outstanding debts, mortgage obligations or a variety of future expenses.

Plus, group life coverage isn’t portable. When you leave your job – whether by choice or circumstances beyond your control – your life insurance coverage may end, leaving you and your family without protection during a period when financial stability is needed most. Starting a new policy at that point may come with higher premiums, as well, particularly if your health has changed since your initial enrollment in the employer plan.

Another significant drawback of life insurance through work is the lack of customization. These plans are designed to cater to a diverse group of employees, and as a result may not address everyone’s specific needs. Your financial situation, lifestyle, responsibilities and future plans are unique, and a one-size-fits-all approach to life insurance may not be sufficient. The great thing about individual policies is that some offer cash value, which is a great way to help plan for your retirement at the same time.

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Get the Best of Both Worlds

Should you get life insurance through work? Sure, work life insurance is a valuable benefit, but it shouldn’t be considered a stand-alone solution for comprehensive coverage. Getting a personalized, individual life insurance plan ensures that your unique circumstances are accounted for in addition to being portable and offering the flexibility to adapt to life’s changing stages. You also get to choose whether you’d like a term or permanent policy.

Regular assessments of your coverage and consulting with a life insurance agent can help ensure that your life insurance strategy remains aligned with your evolving needs, providing you and your loved ones with the peace of mind they deserve.

Learn more about life insurance from AAA.

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