Life Insurance at Work
Hey everyone, welcome to the Bravo Insurance Agency blog and thank you for your time and hope all is well! I want to keep on the same topic that I last wrote about and that’s life insurance. It’s the most important insurance policy you can get. It helps to make sure your family is protected financially if God forbid something happens to you. Ask yourself, what legacy do you want to leave behind?
A common thing I hear when I bring up life insurance with people is “I’m all set, I have some through work.” That’s fantastic! What a nice benefit to have and that is so great to work for a company that takes care of its employees. I recommend getting as much of it as you can because it’s super cheap. But why is it so cheap? Well, because you don’t own it and it’s owned by your company. That means… they can do whatever they want with it! A perfect example is what happened with Sears a few weeks back (March 2019). The company was struggling financially so in order to cut costs they abruptly ended life insurance benefits for 90,000 people. That’s 90,000 people who can no longer protect their families financially if something happens to them (unless they did the smart thing and purchased a policy outside of work that they own themselves). All because a giant company wanted to cut costs. The problem with life insurance at work is you are depending on someone else to take care of your family. You don’t have control.
When you purchase a life insurance policy through an insurance company, you own it. You have the control and you call the shots. There are two different types of life insurance: term and cash value. I wrote another blog post that goes into those different types in detail, so check that out to learn the difference or talk to an insurance professional. Your policy with work should supplement a policy owned by you, not the other way around.
Here is the fine print for most life insurance policies offered by companies (aka group life):
- The amount is limited. How much do you have? A lot of people don’t even know. A typical amount is your annual salary. But, have you gotten a raise over the years? Is your salary the same now as it was when you first started? Does your life insurance at work keep up with raises and bonuses you get? Hmmm, great questions you should ask. A lot of companies limit how much coverage you can get.
- Coverage types could be limited. How does your policy through work cover you? Is it going to cover you if you die for any reason? Is it just accidental death? Does it cover you only if you die on the job? There could be some fine print, ask your company for more details!
- It can go away! What happens if you change companies? What happens if you decide you want to pursue your passion and change careers altogether? What if you want to leave your corporate job and pursue your passion for painting? Can you take the policy with you? Usually not! Think about it like your health insurance with work. If you change jobs you can’t bring that with you. With your health insurance you can apply for Cobra but can you guarantee that you’ll be eligible for life insurance? What if you have a health issue creep up? All good things to consider and think about.
Life insurance through work is a great benefit. Take advantage of it because it’s super cheap. Don’t depend on it though! Use it as a supplement and a secondary policy. Talk to an insurance professional and do a full assessment on how much you actually need. We can help with that too and we do free life insurance assessments all day long. Don’t end up like Sears and make sure you protect your family and leave the positive legacy behind.
Thanks everyone for reading and for your love and support. Cheers!