Most companies – especially larger ones – offer life insurance policies as part of their benefits package. This “group life insurance” benefit is usually a term policy equal to one or two times your annual salary at no cost to you, but it may not be enough coverage.
Company-sponsored insurance plans are beneficial to young, single employees; but those with families should examine their policy to ensure it will cover their survivors’ needs.
The standard group coverage policy offered by most employers is usually a term policy equal to one or two times the employee’s base salary, according to online insurance provider Intelliquote.
Employees should take into consideration their family’s current financial standing and future needs to determine the amount of coverage required. It is recommended to take out a policy that is eight to ten times your annual salary.
If you need more coverage than your employer’s “basic” benefit package, seek out assistance from your human resources department.
Employees may also benefit from lower premiums by taking out an individual policy, depending on their state of health.
Company-offered policies tend to lump employees together into one “overall” health average, resulting in the healthiest people paying the same insurance premium as their fellow colleagues, who may practice unhealthy lifestyle choices.
The number of Americans who switch jobs each year highlights another reason to consider an individual plan. Employees who decide to leave their jobs may be forced to pay more to maintain their insurance policy. While most companies allow their employees to maintain their life insurance, the price often increases.