Why Life Insurance Through Your Employer May Not Be Enough

Group life insurance – couple smiling

If you receive employee benefits from your employer, you may be fortunate to have life insurance coverage included as well. Although a great benefit for you and your family, in actuality, it may not be as much as you need.

That’s why it’s important to understand the pros and cons of employer life insurance options.


"It offers only a fraction of what you actually need."


Benefits of Life Insurance Through Work

Employer life insurance is also known as group life insurance. Here’s how it typically works:

Your employer pays your life insurance premiums for a stated amount of coverage. If you want more coverage than the limited amount that your employer provides, you may have the option to increase your coverage for a higher monthly premium, with the premium deducted from your paycheck.

An advantage of group life insurance is that you can’t be refused coverage you’re approved as long as you’re an employee.

Since the plan costs little or nothing for you, enrolling in it makes good sense. So why look at more options?

The answer is simple. Employer life insurance offers only a fraction of what your family actually could need, and it provides coverage only while you are an employee. If you leave or lose your job, you could no longer have that life insurance coverage.


"A good rule of thumb is to have 5 to 10 times your salary in life insurance coverage."


Using Term Life Insurance as Supplemental Life Insurance

Having an individual term life insurance policy in addition to your employer life insurance can make a lot of financial sense. The big question is: how much additional coverage do you need?

To help determine this, consider that employer life insurance typically offers coverage of 1­ to 2 times the person’s annual salary. That may seem like a lot of money. However, the number grows exponentially when you calculate how much your family may need for living expenses if you’re no longer here — costs such as food, rent or mortgage, transportation, utilities, education and medical, as well as credit card debt and the loss of your income.

A good rule of thumb is to have 5 to 10 times your salary in life insurance coverage.

In other words, if your employer life insurance covers twice your annual salary, then consider buying term life coverage that’s at least three times your current salary. Generally speaking, more is better.

Bear in mind, too, that you may not stay at your current job forever. If you were to leave for any reason, you’d have to surrender your workplace life insurance policy. In addition, if you develop a medical condition even while employed, you might find it difficult to buy additional or replacement life insurance on your own, running the risk of being turned down.

Buying additional life insurance now while you’re healthy is a reliable way to help protect you and your family financially during the years ahead.

Term life insurance can be ideal as additional insurance but it’s also powerful on its own, especially if you don’t have any type of coverage.

Gerber Life Term Life Insurance coverage is easy to get. No medical exam is necessary in most cases, and coverage is dependent on answers to health questions.


Know Your Life Insurance Options

Having the right kind of financial security cushions in place can help prevent unnecessary strain for your family should something happen to you. Employer life insurance is a start. Now, calculate your family’s living expenses and your final expenses to help determine how much money and for how long your family might need life insurance as financial support.

To find out how much a Gerber Life Term Life insurance policy would cost and other specifics, call us toll-free at 1‑800-503-4480. We’re here to help.


Was this article helpful?
50% up
down 50%

You may also be interested in...

How Much Life Insurance Do I Need?

This article can help you decide how much life insurance your family needs.

What is Term Life Insurance?

If you’ve been researching financial protection for your family, you’re probably wondering what term life insurance is all about. We’ve got the answers here!

Term Life Insurance 101: Take Control of Your Family’s Financial Health

Financial health is more than just your personal savings. You also need to consider your family’s financial health. Gerber Life Term Life insurance makes it easy for you to put a family financial plan into action.