Company benefits vary from every employer, and employees may opt for a lower-paying job for comprehensive benefit schemes. If your employer offers life insurance benefits, would it be enough for our family’s needs?
Employee benefits have many forms. Employers may offer paid time offs, flexible working hours, or they may even provide a good health insurance policy. These benefits are one of the critical details why many workers stay in their profession for many years.
If they provide life insurance, that would also be a massive plus in our books. However, it is worth mentioning that not all employers offer this kind of employment package to their workforce. The Society of Human Resource Management suggests that around 85% of companies offer company-paid group life insurance.
Policies such as group life insurance are aimed towards a pool of people such as the workforce of a company. Most of the time, group life insurance is owned by our employers but provides coverage to most, if not their whole staff. In most cases, group life insurance policies are cheaper than individual coverage and are one of the most used in our current market because of its cost-effectiveness.
As an employee, it is an excellent addition to our employment package. However, the caveat for this nice benefit would be the coverage provided by the policy. It is worth checking if our insurance will provide enough coverage. Here are key details we need to know as an employee about life insurance.
Assess If We Need Additional Life Insurance
It is best to first evaluate what life insurance benefits our family needs. Would it be enough to cover their everyday expenditures? Do we have any mortgage loans? Will our family have enough for our kids’ college years?
If one of the answers to these questions is a big fat no, it might be best if to get supplemental life insurance.
Group life insurance is not a policy that will go along with the tagging “one size fits all.” The insurance provider will have to evaluate things such as the policy structure our employers want, the overall demographics, life expectancy, and even their past claims.
Based on the data they gather, they will then provide the pricing based on the policy design, claim costs, and other essential details.
Convertible to Individual Life Insurance
There are policies in the market that provide the option for converting a group life insurance to an individual insurance policy. This usually applies to reduced or terminated policies. An insurance provider may also offer this option for any other cases other than non-payment coming from our employers.
If this option is available, we may convert all or a part of our coverage from a group life to an individual life policy. This is recommended for people with medical conditions who find it hard to qualify for individual life insurance.
Most group life insurance policies coincide with our employment status. This generally means that our eligibility and our overall policy may lose once our employment status ends.
With that said, it is best if we can get information about our policy if they provide the “port” option. This means that we can get a portion if not all of the coverage from our past employer to the new company we will be working with.
Just a quick side note. In most cases of porting our policies, we will be responsible for our premium.
Every employee needs to know if there are add-ons in our group life insurance. We usually see add-ons such as a waiver of premium benefit or accelerated death benefits, and it is crucial to know these.
Accelerated death benefits will help employees with a terminal illness. This will give them around 50-90% of their life insurance payout. However, these figures may depend on how our policies are structured.
A waiver of premium benefit, on the other hand, provides the insurer with the ability to still pursue their group life insurance without having to worry about their premiums. There are specific criteria we need to meet for us to qualify such as the employee should not be over 60 years of age and have become totally disabled for at least 180 days.
With these details, we will be able to carve out a good grasp of our overall group insurance policy.
Article based on