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My Employer Has Given Me A Life Insurance Coverage, Do I Need Another?

Nowadays, many full-time jobs come with a huge number of facilities and one of them is life insurance coverage.

It means that you get life insurance coverage from your employer side. And trust me, this is the most common thing you get in any company.

But the question here is if you have one life insurance (from your employer), do you need another?

Well, it all depends on your requirement.

But before going to that, you must understand what are the advantages and disadvantages of life insurance coverage given by the employer.

So, without wasting any seconds, let’s get started…

Advantages of Life Insurance Policy from Employer Side:

#1 Easy Qualification

You may be knowing that to take a life insurance policy, you have to go through several steps and one important step is health checkup.

And if something comes wrong after health checkup, the insurance company may refuse to sell life insurance policy.

However, it depends on the policy your are buying and also on the health condition.

But in employer’s case, you need not worry about your health condition or anything else.

So, here, in this case, even if your health condition is not so good, suppose you have some heart-related issues, you can easily have a life insurance coverage.

#2 Lower Cost

We normally believe that Term Life Insurance is the affordable life insurance policy we can get.

But if you are getting a life insurance policy from your employer then the premium cost would be very low (much lower than normal premium) for you or in some company’s there is no cost for such life insurance policy.

Actually, company subsidizes these life insurance policies for their employees and hence, they have to pay a very minimal or no fees.

So, if you are getting a life insurance coverage from your company, never leave the opportunity as by spending few bucks each month, you can have huge coverage.

#3 Convenience

As we have already discussed that enrolling for the life insurance policy is very easy when it comes from the employer.

Not only that, you don’t have worry about several paperworks as the company takes your guaranty.

Adding more, for some companies, you need not remember the premium dates. Well, these companies simply deduct the premium amount ( if applicable) from your paycheck.

Well, these companies simply deduct the premium amount ( if applicable) from your paycheck.

So, these were the advantages of having life insurance policy from the employer but are these the only considerations that matter when it comes to life insurance?

Well, the answer is NO.

Here are the few disadvantages of having a policy from the employer, which will definitely help you to decide whether to take another policy or not.

Disadvantages of Life Insurance Policy from Employer Side:

#1 Job Changes, Coverage Changes

Now, very few of us know that these policies which come from employer changes or discontinue when you change your job.

Even you are not changing the job, but changing the position or designation, the policy would change. However, it depends on the company’s term & condition.

In short, if an employer has given any life insurance policy, then always keep in mind that it would only last till you are working in the organization.

Once you resigned, your policy would either collapse or your employer would remove you from subsidized category.

#2 Coverage May End When You Reach a Certain Age

Many policies, given by the employers, have a condition saying that the policy would cover until you reach a certain age and after that, no coverage would be given.

Now, majorly we need insurance coverage when we get older but these policies stand void when we need them most.

#3 Employer Has Right to Change or Terminate Policy

If you have taken a life insurance policy from your employer then remember that you don’t have the sole ownership of your policy.

The employer has right to change or terminate the policy anytime and to do that, the employer doesn’t need your consent.

So, in these types of policy, you remain in dark about when your employer would change or terminate your policy.

#4 You Have Limited Option

Employers provide only those policies which are suitable for them, hence never expect many options while choosing a life insurance policy.

It may possible that the policy offered by the employer doesn’t meet your requirements and in most cases, it happens the same.

So, never expect much from these policies and take whatever you get, as these have subsidized premiums.

Importance of Buying a Separate Life Insurance

Now, you have learned the advantages and disadvantages of the life insurance policy provided by the employer.

You can understand why it is necessary and advised to buy a separate policy.

But having a separate policy doesn’t mean that you wouldn’t take the policy provided by the employer.

Having an another life insurance policy makes sure then if anything happens to you, your family wouldn’t have to depend only on the employer’s given policy.

It also makes sure that if employer changes or discontinues the policy, your family’s financial future remain secure with the second option which you have bought.

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