Life & Disability Income Insurance

Life Insurance

• Term Life Insurance
• Permanent Life Insurance
• Policy Performance
• Prospectuses
• Employer-Sponsored Life Insurance Benefits

Disability Income Insurance

Employer-Sponsored Life Insurance Benefits

Questions employees should ask during open enrollment.

Annual benefits enrollment can present employees with an increasingly complex set of financial decisions each year. As a result, many employees do not sufficiently evaluate available employer-sponsored insurance coverage along with individual coverage to help ensure appropriate levels of protection in the critical area of life insurance.

Five key questions about employer-provided life insurance coverage

• Does your employer-sponsored life insurance provide adequate protection? The level of life insurance coverage available through an employer-sponsored plan is typically one times your annual salary, before a medical evaluation is required. In a majority of cases, this is inadequate protection without an additional individual policy. Like employer-sponsored disability income insurance, this coverage doesn’t usually include bonuses or commission income above the base salary amount.
• What costs are associated with increasing your coverage through your employer-sponsored policy? Increasing coverage through an employer-sponsored plan to an adequate level of protection is often more expensive than through an individual policy. In group plans employees pay premiums based on the risk profile of the entire employee base. Depending on your individual situation, that’s not necessarily the best value.
• Would you lose your employer-sponsored life insurance if you switched jobs or became unemployed? As with disability income insurance, an individual life insurance policy protects you during a job transition. Employer-sponsored life insurance coverage may not be portable or convertible, and may not be available from your next employer.
• Can your employer-sponsored life insurance coverage be customized? Group life insurance coverage doesn’t generally provide the product types, features or riders that are suited to individual needs. Group coverage is a one-size-fits-all approach.
• Does your employer-sponsored life insurance provide income replacement for a non-working spouse? Income replacement for non-working spouses is an important and often overlooked life insurance need that an employer-sponsored policy doesn’t cover. An individual policy on a non-working spouse can provide for such things as day-care costs, housekeeping, or nursing care in the event of their tragic death.

Often people don't realize that employer-sponsored coverage alone is not enough. While everyone should take advantage of the low-cost, basic coverage often available through an employer, most should also combine it with individual insurance protection. A financial professional can help you understand what combination of protection will meet your individual financial goals and needs.