I have life insurance at work. Do I need my own policy?
What group life actually covers, what happens to it when the job ends, and how to decide whether to add coverage of your own.
Group life through an employer is a real benefit and worth having. It is also usually smaller than people think and it belongs to the job rather than to you.
How much it usually is
Most employer plans provide one or two times your annual salary. On a 50,000 dollar salary that is 50,000 to 100,000 dollars. Measure that against a mortgage balance and years of income your family would need, and the gap is usually obvious. Our coverage worksheet takes about ten minutes.
It ends when the job does
This is the part that catches people. Layoff, resignation, retirement, a move to a company that does not offer it: the coverage stops. Many plans offer conversion to an individual policy, but the conversion rate is usually high because nobody is checking your health.
The worst version is losing the job in your late fifties after a health event, when the group coverage ends and individual coverage has become expensive or unavailable.
Owning your own policy fixes the timing problem
A personally owned term policy stays with you regardless of employment, and the premium is locked at the age and health you bought it at. Buying one while you are healthy and employed is the cheapest version of that decision you will ever see.
How to layer them
- Keep the group coverage, especially if the employer pays for it
- Count it toward your total, but do not build the plan around it
- Buy an individual term policy for the difference between what you need and what work provides
- Revisit after any raise, mortgage or new child
One tax note
Employer paid group life above 50,000 dollars creates a small amount of imputed income on your W-2. It is usually minor, but it is worth knowing what that line is when you see it.
We will tell you whether you need more
Bring your benefits summary. If the group coverage is enough for your situation, we will say so. Call (956) 687-3334. Se habla español.
Common follow-up questions
Can I take my group policy with me?
Sometimes, through conversion or portability, and usually at a higher rate. Ask HR for the exact terms in writing before you rely on it.
Should I buy the supplemental coverage my employer offers?
Compare it. Employer supplemental life is sometimes cheaper for smokers or people with health issues, and often more expensive for healthy applicants than an individual policy would be.
Does my group life cover my spouse?
Some plans offer a small spouse and child benefit, often 5,000 to 10,000 dollars. It is not a substitute for real coverage on a working spouse.
Want this looked at properly?
We are an independent agency in McAllen serving Hidalgo, Cameron and Starr counties. No cost to talk it through.
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