Many employers offer group life insurance as part of a comprehensive benefits package – but is that enough? According to The Ramsey team, the answer is no. While it is only to your benefit to accept it if your employer offers to pay for your plan, you do need additional coverage outside of your job. Here’s why:

If you leave it, you could lose it.

Most group plans are not portable, meaning if you leave your current employer, you lose that coverage or must medically re-qualify. This is the main reason The Ramsey team suggests having no more than 50% of your coverage through your employer’s group plan. If unexpected health issues arise after you leave your job, you may not be able to qualify for the low rates you could be eligible for now.

Your benefit may not be enough.

Typically, the death benefit that comes with an employer plan is far less than you need. The Ramsey team recommends 10-12 times your income in coverage, whereas most group plans offer far less. Many group plans also reduce the benefits you receive as you age, driving down the value even further.

Prices can go up (and might be too high to start with).

Depending on the age of the group, your employer’s plan may be more expensive than purchasing a policy on your own. Even if it turns out that your group plan is competitive, the guaranteed rate on these types of policies typically only last two years. That means when that time period is up, you may have to pay more. The Ramsey team opting for a 15-20-year level term plan, which guarantees that your rate won’t change during that time.

The bottom line – whether you have coverage through your employer or not, you should get coverage outside of a group plan. Our Zander agents are here to help by shopping the top-rated term life insurance companies to find the most competitive prices. Get started at the link below or by giving us a call at 1.800.356.4282.

Reviewed by Jeff Zander, CIC, CEO
Certified Insurance Counselor with more than 40 years of insurance industry experience

Jeff Zander is the fourth-generation CEO of Zander Insurance and a Certified Insurance Counselor with more than 40 years of insurance industry experience. Before joining Zander Insurance in 1986, he worked for Northwestern Mutual and Progressive Insurance. Throughout his career, he has provided counsel and guidance across multiple areas of insurance, including life insurance, disability insurance, home and auto insurance, business insurance, employee benefits, identity theft protection, and the operations of a national independent agency.

Under his leadership, Zander Insurance has earned numerous industry, carrier and workplace awards, including recognition as a Big “I” Best Practices Agency by the Independent Insurance Agents & Brokers of America and Reagan Consulting, and as a Nashville Business Journal Best Place to Work.