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Should I Purchase Additional Term Coverage Outside of My Employer’s Group Plan?

2012 November 6

If your employer is paying the cost of your life insurance plan, it is only to your benefit to accept it. If you have to incur a cost, you should certainly compare it with the cost of the other plans outside of the group. These plans are often tricky, as they can have a simple enrollment process but not be cost-effective for you in the end. Even if your employer plan has cost benefits, Dave advises having no more than 50% of your coverage through your employer since most plans are not portable. Therefore, if you leave that job, you will either lose your coverage or will have to medically re-qualify at a time when you need the coverage the most. If your plan is convertible, that typically means you can take it with you, but will have to change to a cash-value plan, which Dave is adamantly against and should be avoided unless you cannot qualify for a term life plan individually. Many group plans also have benefit reductions as you get older, usually dropping the benefit coverage when you reach age 60 or older. Though employer group rates may be lower, the pricing of these plans tend to only be guaranteed for two-year periods, compared to the level-term plans Dave recommends of 15 or 20 years. Compare rates for free online or call us toll-free at 800-356-4282 to speak to a Guide.

Learn more about why your employer’s group plan is not enough.