Life Insurance Through Your Employer? Why You May Want to Shop Around

Transcript

Hey guys, Mike Frontera here with Retirement Theory and today I have got a little tidbit for you on life insurance, specifically group life insurance, which is the coverage that you might get from your employer. Now, a lot of times I will see people come into the office that have insurance through their job and when we start talking about the need for individual coverage, they think, “Hey, I’m all set, you know. I’ve got three times my salary and that’s enough to protect my family.”

What it fails to recognize is the major drawback of group coverage. And that major drawback is that anytime, if you lose your job, whether you leave or you get laid off, that coverage is gone. And so, if you are with a company, let’s say, for a long period of time, 10 years, 20 years, whatever, you’ve aged 10 or 20 years or more, so now if you still need the coverage for your family, but you no longer have that job, you have to go out into the marketplace and qualify for an individual policy based on your health at that time. So a lot of things can happen between ages, you know, 25 and 55 that will either make your premiums much higher or, worse case, make it so that you can’t get coverage on your own at that point.

What I would suggest is that no matter what when you start with your company if you need coverage for your family that you investigate getting a policy based on you qualifying as an individual, even if you have coverage offered to you by your employer. That way, you know what your health status is now, you’re young enough where the premiums are reasonable, and you can lock that coverage in for ten years, twenty years, however long you need it without having to worry about having to qualify later.