Supplemental Life Insurance is usually offered as an extra employee benefit option at large companies. It is a life insurance benefit that can be bought through a payroll deduction for a low cost and usually with no or few medical questions. Sounds good but is it worth it?
Do you need supplemental life insurance?
Before you buy supplemental life insurance, you should really take a good look if you need life insurance at all.
People who do not need insurance may be those without any dependents, any debt or anyone depending on them financially. Ask yourself “if I were to pass away, would anyone be affected financially?” If that answer is no, then you should probably not be buying supplemental life insurance or any insurance at all.
How much supplemental life insurance should you buy?
If you have determined that you do need insurance, you can use this calculator to see how much you should consider buying.
Life Insurance Calculator from LifeHappens.org
Life Insurance is meant to cover a financial shortfall and they generally are used to pay for:
- College Funding – if you have kids
- Pay off Mortgage
- Final Expenses
- Pay off outstanding loans like credit cards or other loans
- Make up for lost income for surviving spouse.
- Pay estate taxes for large estates
- Money to be left in trust for beneficiaries.
Where should you buy your life insurance?
You’ve determined you need insurance and now you know how much so the next step is to get quotes and buy it.
The supplemental life insurance option through your employer will be an easy option because it can usually be paid for through payroll deduction and you have the ease of signing up without medical questions. The downside to this is that you may qualify for a better rate if you were to apply on your own.
Key Things to Consider When Deciding Between Supplemental Life and an Individual Policy
- If you need x amount of coverage, can you purchase that much through the supplemental life program?
- Is the supplemental life coverage portable? Can you take it with you if you leave the company? And for how much money?
- Are you in good health or bad health? Good health may benefit by buying individually but unhealthy people may get a better deal through the supplemental life program.
- How long do you need the coverage?
- Supplemental Life Coverage can be discontinued at the discretion of your employer. Are you ok with that or would you prefer to have control over your own policy?
Supplemental Life Insurance can be a great choice to buy a little bit of life insurance coverage for those that need it, but it’s not always the best option.
You can get a life insurance quote here on the ING website or request one directly from me. It’s always a good idea to get an individual quote so you can compare it to your supplemental life options.
I’d love to earn your business. Please contact me for a personalized life insurance quote and I will help you evaluate all of your options.
Additional Reading – What you need to know about life insurance – From LifeHappens.org