Buying Life Insurance Through Work

buying life insurance through work

Is Buying Life Insurance Through Work Enough? Do I Need Another Policy?

Working full-time in a good company has its own value. You get to receive many perks including benefits package that comes along with a good pay. Often, those benefits include life insurance coverage, which is great. Buying life insurance through work is an undeniable choice made by many employees. Let’s discuss in detail:

Buying Life Insurance Through Work:

If your company is offering company-funded life insurance, also known as group life insurance then you should definitely take it as it has many advantages:

  • Convenience
  • Price
  • Easy qualification


People who need life insurance but are not willing to go through the process, find employer-provided life coverage the best option. It is the easiest way to get your family covered. There is not much effort on your part and if a payment is required, it’s easily deducted from your paycheck.


Employer funded life insurance is supposed to be paid or subsidised by the company, making it possible to get life insurance coverage at a very low cost. With group plans, cost per individual goes down. If you are an aged person you can get a good deal on this type of insurance.

Easy Qualification:

It’s easy to enroll in an employer funded life insurance coverage as there is no medical exam required. People with not-so-perfect health can also much better rates compared with what an individual life insurance policy will cost them.

All these advantages may sound great but will probably make you wonder if these are the only considerations that matter when it comes to life insurance? Obviously, they are not. The primary purpose of getting a life insurance is to cover the needs of your loved ones in the event of your death.  If a policy is not big enough to meet financial challenges for your family in the future then relying solely on it is a bad idea.

Why you need Additional Coverage?

You may find obtaining life insurance from work quite enticing but there are some disadvantages you should be aware of with this type of insurance:

1. Not Enough Life Insurance:

Sometimes the face value of the employer-provided life insurance is not high enough. In the case of your premature death, the coverage is usually worth five to eight times your annual salary to cover your family’s financial problems. Although this may seem like a lot, it is not the case.

According to Mitchell Barber, a financial services professional at the Center for Wealth Preservation, a Syosset, N.Y.-based agency of MassMutual Financial Group, death benefits do not consider account bonuses, commissions, second incomes and any additional benefits that you may get during employment.

2. Losing Coverage When Changing Job:

Most people are unlikely to stay with the same employer throughout their career. If your life insurance is tied to your job, it becomes difficult to make certain job changing decisions. In scenarios like getting laid off or employer going out of business, you will not be able to keep your policy and there will be gaps in your coverage. This leaves you vulnerable and you end up looking for the best and fastest solution you can find. Aging and the chance of developing a serious medical condition can also make your premiums seriously high.

Like health insurance, you cannot afford gaps in life insurance. It’s suggested to take an additional life insurance policy of your own that is reliable and is in effect even if you lose your job.

3. It May Not Be the Cheapest Option:

If you are young and healthy, it’s better to shop around and see if your employer-provided life insurance really offers the best value for the money. The policy provided by your employer gets expensive as you age, however, if you buy a guaranteed term life insurance policy, it will cost you the same amount every year as long as you have the policy.

4. Limited Options:

Group insurance is not tailored to your specific needs. It does not give you an option to buy as much coverage as you need and is more of a wholesale deal.

What to Do?

It’s good to take advantage of any free or inexpensive life insurance coverage that your employer is providing but solely relying on it is a bad idea. To make sure you are getting 100% coverage at all times, you need to purchase an additional insurance policy that you personally own. Individual life insurance plans can be tailored to meet your needs and remain in place regardless of your employment status. For your convenience, instant life insurance quotes are easily available online.

Having an individual life insurance policy makes sure that your dependents have enough financial means to keep their lives in smooth motion in the unfortunate event that you are no longer there to care for them.

If you have any concerns when buying individual life insurance, don’t hesitate, just give us a call at 1-800-521-7873 or visit our life insurance quotes page to see how we can help you.

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