Should I Stay With My Company Insurance Policy or Get My Own?

Human ResourcesWhen you land that new job one of the first things you negotiate is your salary. After that comes along the details about the employee benefits you will receive. Most employers offer life insurance, but how do you know if you should stick with the company’s policy or if you should get your own policy? We are going to discuss the benefits and downfalls of getting insurance through work vs a personal policy.

First you must know that it is advised that you get a life insurance policy that is eight times the amount of your annual income. The policy you are offered at work will, on average, equal one year of your income. If you choose, you can get more coverage and pay the difference yourself. If you are single with no dependents, you might see that as an easy way to get a life insurance policy. However, the younger you are, the more likely it is that you are not planning to stick with your employer for very long and you have more career changes ahead. Remember, that each time you get a new job, you have to go through the process of getting life insurance all over again. On a similar note, if you get laid off, you will be left without insurance. For these reasons, we recommend that if you are in a transitional period in your life and you don’t plan on sticking with the company for very long, you should get a personal term life insurance policy. By doing this, you will avoid the possibility of having to switch life insurance policies when you change jobs. Most importantly, if you are young and healthy without any pre-existing conditions, you could probably receive the same, or better, policy for a cheaper premium. Of course, if your company is covering 100% of the costs, take it! That being said, good company policies will typically cover between $25K and $50K, which means you will still need to buy a personal policy. In this case, consider the company policy a bonus!

Now, let’s take a look at work life insurance from a different perspective. If you are employed by a company that you plan on working with for many years, it can be beneficial to purchase life insurance through work. If you have a pre-existing condition, like diabetes, you might be able to get a better rate for the policy. You should max out the work life insurance policy because it will be more difficult for you to get a traditional term life policy. Signing up through work is usually easy. You are included in a group plan and the money is automatically deducted out of your paycheck every month.

Whether you purchase life insurance through a third party provider or your employer, you should contact an insurance agent that can best assist to determine the coverage you need. As always, SelectQuote agents are readily available to answer any of your questions – (800) 670-3213

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