Many of us receive our life insurance through our employers, and it’s often cheaper that way. But there are ways to get creative: namely, buy life insurance on the open market. Here are three reasons to consider that.
First, your employer may not offer enough life insurance to meet your needs. If your death would burden your loved ones, experts often recommend you obtain coverage worth five to 10 times your annual salary. And be sure you include all your income (wages as well as bonuses and commissions) in your calculations. They are easy to overlook, and they count.
Second, when you move between employers, you could lose your policy. Your new job may offer new life insurance coverage, but it may not be as comprehensive. This is particularly problematic as we age, because we’re then less likely to be healthy enough to qualify for an individual life insurance policy. And if we are, it might be very expensive. Additionally, it’s always possible that your employer may stop offering life insurance to save money, leaving you without coverage.
Lastly, with employer-sponsored life insurance, you don’t get to choose the provider. It’s possible that the insurance carrier your company has chosen is rated lower than you’d like and the insurance you paid for won’t be there when you need it. Your carrier’s AM Best rating will tell you whether the company is financially stable or not.
While it’s certainly wise to take advantage of any low-cost or no-cost life insurance your employer offers, you may want to supplement that insurance with insurance from other sources. Just be sure you purchase enough!
If you decide you need supplemental life insurance, purchasing it costs more as your age increases. Before doing so, then, you should talk to us. Call or email us for more information.