• Tenaya Insurance Services

I Already Have Life Insurance Through My Job . . . Why Do I Need Another One?


One of the biggest perks to having a full-time job with a great company is the benefits that they can offer you. In many cases those benefits include life insurance coverage. This is a great perk, and if they offer it, you should take it. In most cases it's free coverage, and we all like to get something for free right? But a life insurance policy through your employer shouldn't be the only one you have, and let me explain why . . .

Life insurance policies offered through employers are group policies. There are a few advantages to these types of policies:

Advantages:

1) Lower Costs: Employer insurance plans tend to be paid for or subsidized by the company, which means you receive this coverage either for free, or at a low cost. You might even have the ability to buy additional coverage at low rates. Costs tend to be lower with group life insurance policies because with group plans, the cost per individual goes down as the plan enlarges.

2) Easy Qualification: In most cases, enrollment in group life insurance is automatic. That means everyone qualifies, and there is no medical exam required (Yay! No peeing in a cup!). For people who have pre-existing health conditions like diabetes, or heart conditions for example, they are able to get life insurance through their employer and in some cases they may be able to get a better rate than what an individual policy might cost.

3) Convenience: It's easy to obtain group life insurance coverage through your employer with very minimal effort. In many cases it costs you nothing, but if you are required to contribute towards the premium this can easily be deducted from your paycheck.

These are all great advantages, but these aren't the only requirements that you should have on your radar when it comes to your life insurance coverage. When you step back and look at it, there are some serious gaps.

Disadvantages:

Life insurance is one of the most important purchases you can make in your life. It can be the difference between your family being able to stay in their home, and maintain their lifestyle while they learn to adjust to life without you, or your family having to really struggle financially while they are also dealing with the emotions of their world having just changed in an instant. What type of coverage, and how much of it you need to truly protect your family is going to differ from person to person. Most employer provided insurance policies are set at one to two times your salary, or a pre-determined amount such as $25,000 or $50,000. How far will that go in protecting your family? Not very far.

So what are the disadvantages to relying solely on your employer provided group life insurance policy?

1) If your job status changes, say goodbye to your coverage: We can't tell you how many conversations we have had with people who had no idea about this disadvantage to relying solely on their policy at work, and they've all said "If I had known , I would have gotten my own policy a long time ago . . . " If your job status changes (you retire, you quit, you're laid off,) in most cases you will lose your coverage. This is a huge disadvantage because with life insurance, one of the biggest factors to how much you pay for coverage is your age. Simply put the younger you are, the cheaper it is. So let's say you spend 20 years working for a company and you are laid off. You never got your own individual policy, so now you're 20 years older and the rates you're going to pay for the same amount of coverage will be significantly higher than if you had secured something earlier.

2) When you retire, your coverage might too: Many people tend to loose their coverage when they continue working beyond a certain age, or when they retire. This means you're losing your coverage when you need it the most. If your health allows, you could still buy your own coverage but the premiums you'd pay in your 60's for the level of coverage you'd likely want will give you sticker shock.

3) Your employer holds the power: With group life insurance policies, you don't own the policy. Your employer does. The contract is between them and the insurance company. This means they can change or terminate your coverage at any time . . . even without your consent.

4) Your options are limited: Group life insurance policies are not tailored to fit your needs. They're more of a "one-size fits all" type of thing. And if you don't have enough coverage to cover your family's needs, then you're exposed. Your employer is not going to sit down with you and go over the goals for your life and shop multiple insurance products to find the best one to fit your needs and facilitate the plans your family has for your life. They work with one company, and they provide one type of policy, that's it.

The Importance of Owning Your Own Policy

You always want to be in a position of strength, where you are in control of your family's financial future. If your employer offers a group life insurance policy, take it! It's free coverage, and it doesn't hurt to have more. But you should always have your own individual policy that you own, and you control. These policies offer superior benefits, and can be tailored to fit your specific needs and life goals, and most importantly it doesn't matter where you go career wise . . . the policy is yours!

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Don't depend on an employer to protect your family's finances. Take control by getting your own individual policy in place. Call Tenaya Insurance Services today at (925) 322-8073.

#Lifeinsurance #Finances #EmployeeBenefits #GroupPolicies #Insurance

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