Is Employer-Provided Life Insurance Coverage Enough?



  • Work-Related Restrictions – Like the “Basic” coverage, it typically requires you to be “actively” working.
  • Increasing Premiums – Typically, costs increase each year as you age.
  • Most people do not understand that an Employer Life Insurance is Not Portable – You can’t take the policy if you leave the employer. 

As part of your employee benefits package, your employer may provide some group term life insurance. While that’s a nice perk, especially if you have no other life insurance in place, it’s important to consider whether it’s sufficient to meet your financial needs.

1: While basic employer-provided life insurance is usually low-cost or free, your policy’s face value still may not be high enough. If you have dependents who rely on your income, then you probably need coverage worth at least six times your annual salary. 

2: You Can Lose Your Coverage If Your Job Situation Changes

As with health insurance, you don’t want gaps in your life insurance coverage because you never know when you might need it. If you change jobs, are laid off, reduced to part-time status, or even retire, then you could lose your employer-provided life insurance.

Another problem arises if you’re leaving your job because of a health problem. If you rely solely upon an employer group insurance, and then suffer a medical condition that forces you to leave your job, you may be losing your life insurance coverage just when your family is going to need it the most.