Do you have a life insurance policy through your employer? If so, you might be at more risk than you'd think. Relying on an employer-paid policy can be risky. Everyone needs to own a life insurance policy, separate from their employer.
1. Their Policy is Never Enough
Many employer-paid plans only provide 1-2 times your annual salary as the death benefit. This is never enough to take care of your loved ones. An easy way to determine how much life insurance you need, is to use a life insurance calculator. If you'd rather talk to another human about it, we can of course help with that.
2. Their Policy May be Taxable
Because some or all of the life insurance benefits from work are paid for by the employer, the benefits might face some unfortunate taxes. We've talked about this before here on our blog. No one wants to pay more taxes and lose out on money that should have been in their own pocket.
3. Their Policy Can't Go With You
Similar to other benefits, if you leave the company you can’t take the life insurance with you. The position with your new company may not come with group life insurance. The average employee only stays at the same business for 4.4 years. Typically, group life is only available from a large employer. With 50% of the working population employed by a small business, it makes sense to go ahead and have your own policy in place.
When it comes to life insurance, you don't want to risk leaving your loved ones in a financial lurch as they mourn.