6 REASONS YOU SHOULD GET LIFE INSURANCE OUTSIDE OF WORK

Most employers provide basic life insurance plans for their employees. The coverage is usually of a set amount and offered as part of the employee benefits package. It is designed to protect the families in the event of the employee’s death.

While the policy may come cheap and easily accessible, it has several shortcomings that make it insufficient to cover the needs of your dependents. 

Here are six reasons why you need life insurance outside work.

You, Will, Lose Your Coverage If You Change Jobs

Since the life insurance policy is a direct benefit of your job, you won’t be able to keep it if you are no longer employed by the organization. So you stand to lose the policy if you are laid off, change job or the company closes.

Though you may decide to stay on your current job for as long as possible, the policy will still come to an end eventually.

It Becomes Problematic If Your Health Declines

Given that your policy is tied to your job, if you have a significant health problem that forces you to stop working, then you may lose the benefit of the coverage when you need it most.

Human health decline as we age, so at some point, you may have to leave the job, and it may be too late at that point to buy your coverage.

You Don’t Have Control Over The Policy

Your options are limited to group life insurance. The policy is not tailored to meet your needs. Moreover, your employer can change or terminate the coverage with or without your consent. They can buy a life insurance policy with low-rated companies which offer very little.

This can be a problem, as you won’t get enough coverage when the situation calls for it.

It Doesn’t Provide Coverage for Your Spouse

While most Companies insurance benefits policy provides health insurance coverage for employees’ spouse, it usually doesn’t offer life insurance cover. Even if it does, it will be inadequate to keep a family who had lost a husband or wife unexpectedly.

So if the spouse is a low-income earner, then they have to take up more work to meet up the family expense.

It May Not Be Enough to Meet Your Needs

As stated earlier, the amount of coverage from a group insurance policy will likely fall short of what you need. The average amount from most employers’ life insurance policy is $100,000 or maybe one or two times the employee’s salary. However, the employees family may need more than half a million dollars to live comfortably.

The amount from a group policy is a far cry from what you will get from a private insurance plan.

It May Not Be the Cheapest Option

While the group insurance plan may appear cheap, it may not be so cheap if you consider what is offered. If you shop around for other alternatives, you will discover that your work policy doesn’t provide the best value for your money.

There are numerous cheaper alternatives out there that cost almost the same amount yearly and offer more coverage. Additionally, while the cost of employers’ coverage may be less expensive at the beginning, it increases as you get older.

Bottom line

Whether you rely on your employer's coverage or buy an additional policy, the key is to ensure it provides adequate support for your dependents when you pass away.

Some Employers policies allow you to convert group life insurance to an individual one. Though the conversion may be more costly, you may consider it when making your decision.