Your Employer Life Insurance May Not Be Enough

EL DORADO HILLS, Calif., April 8 /PRNewswire/ -- Nearly all employers offer life insurance to their employees as part of their employee benefits package -- but is this the best option for you?  Not necessarily, according to leading life insurance experts.  It helps, of course, but employer provided life insurance  policies may not offer enough coverage for most individuals or families, and you could be paying a higher rate if you buy-up your coverage.

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"There are many advantages to buying an individual policy in addition to, or instead of, an employer-sponsored plan," said Gary Lardy, CEO of IntelliQuote (www.intelliquote.com), an online life insurance provider. "The first step is to realize you need life insurance, but being aware of the upsides of an individual policy is important to ensure you are adequately covered and prepared for the future."

Coverage That Secures Your Family's Future

It's critical to purchase the appropriate amount of life insurance to cover your family or loved ones' needs after you are gone.  Employers typically provide group coverage at one to two times an employee's base salary, at no cost to the employee. Consider earning potential and cost of living needs for your loved ones when assessing life insurance coverage.  To adequately provide for your family's financial needs, you should consider buying a policy that is at least 8 to 10 times your annual salary depending on your age and financial responsibilities.

This means that someone who makes $50,000 a year should consider a policy of at least $500,000 to protect the future for their loved ones. Even if you buy-up from the base coverage your employer provides, you're still paying the employer's group rate and the policy may not provide the coverage your family needs.

The nonprofit LIFE Foundation provides a life insurance needs calculator (www.lifehappens.org/howmuch), which can serve as a good starting point in assessing your coverage needs.

Class Ratings and Group Plan Premiums

Your employer receives a group rate that assumes an average of the overall health of all employees who participate in the plan. This means that while you may be in near-perfect health, you are still paying the same rate as your coworker who smokes, does not exercise, and has a history of cardiovascular disease in the family. Chances are you can find an individual policy at a better rate.  

The premium for an individual policy is based in part on your health class rating: Standard, Standard Plus, Preferred or Best Class. When you purchase an individual policy, your health class is determined by an assessment of your medical and family history as well as a comprehensive medical exam.

You Can't Always Take It with You

While many group plans offer employees the option to take their coverage with them when they leave their jobs, the costs to do so are high because it typically involves converting the coverage from a term policy to a more expensive permanent policy. In an era when few employees stay with a company for a long period of time, people are often better served by purchasing an individual term policy that will stay with them for 10, 20, even 30 years, depending on the needs of their families.

Though life insurance provided through your employer is a solid part of an attractive benefit package and can provide excellent supplemental coverage to an existing policy, remember that it might not be enough to protect your family when you're gone. With an individual policy, you are given the option to choose a policy that fits your exact needs and you don't need to worry about losing coverage, as long as you pay your premiums.

"No one wants to gamble with their family's financial future, but that's essentially what people are doing when they don't buy life insurance coverage that they know they need to protect their loved ones," said Marvin H. Feldman, CLU, ChFC, RFC, president and CEO of the LIFE Foundation. "If you're one of the millions of Americans who lacks adequate protection, it's time to stop making excuses and buy while you still have the chance."

ABOUT INTELLIQUOTE

Since 1997, IntelliQuote has provided customers simplified, private access to compare, shop and buy life insurance online.  IntelliQuote offers clients a wide selection of competitive products from A-rated carriers, supported by licensed agents.  This simplified approach makes purchasing life insurance easy and straightforward while providing a savings of up to 70% per policy. IntelliQuote is a member of the LIFE Foundation and is committed to ongoing consumer education.  For information on how to estimate how much life insurance an individual might need, visit: http://www.intelliquote.com/resources/life/term-life-insurance-calculator.asp.

For more information, contact www.intelliquote.com, or 888.883.6855.  

SOURCE IntelliQuote