Term Life Insurance FAQ
LIFESTYLE
Q. I have a group term life insurance policy through work.
Do I still need an individual policy?
A. Group life insurance from employers is a wonderful benefit,
but there are several reasons why you should not solely rely
on it for coverage. In most cases, group life insurance simply
doesn’t offer enough protection for your loved ones.
It might match your salary for a short period of time —
possibly one or two years — but in the realistic scheme
of things, that is not enough to prevent financial strain.
What happens when it runs out? Will your family need to sell
your home or liquidate retirement assets?
Another reality is that you will typically lose the coverage
of your group life insurance policy if you leave your job.
And if you’ve developed a medical problem, you might
find it difficult, or impossible, to get new coverage. Some
employers allow you to keep your group life insurance policy
when you leave, but it usually costs significantly more than
when you were employed with them, and there is always the
possibility that they will stop the coverage or switch to
a plan that won’t accept you.
Because group life insurance plans through employers typically
don’t offer enough coverage and might not be available
to you if you leave the company, it’s a good idea to
consider yours a supplement to your life insurance —
a welcomed bonus, but not your main policy.
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