An employer-provided Life Insurance policy that’s offered to you at your workplace is called Group Life Insurance. The reason it is called Group Life Insurance is because it is offered to a large group of people; that could include you and your colleagues. A Life Insurance policy provided to you by your employer may seem perfect, particularly if it is provided to you at no cost. There is no research or guesswork you need to do with Group Life Insurance as your employer will present to you the various policy options. It is now your decision to select one of them. All you will need to do is to fill out the form of your chosen policy, decide who you want your nominees and beneficiaries to be and voila! Your Life Insurance coverage begins. Isn't that easy?
Now for you to have a better understanding of how a Group Life Insurance works, here is some more important information. When it comes to a Group Life Insurance policy, your employer will own the policy and they may pay all or some of the premiums. Coverage is normally guaranteed and for you to be part of this insurance, you might be enrolled automatically, or you may have to wait until enrollment opens up to sign up for the insurance. There will be no medical exam that you would need to take and whoever is covered under the policy enjoys the same premium rate.
For group policies, usually, the offered coverage amount is one to two times your annual salary. You may be given an option to buy more coverage. However, you will have to pay for any difference in coverage. This might also require you to take a medical examination.
For you to decide if your employer-provided coverage is adequate, you will need to first understand how much of Life Insurance would you need. This would largely depend on if you are married, have kids and what you would like your Life Insurance to provide to your loved ones. For someone who has a family, kids and financial goals, it’s always advisable to not rely solely on a Group Life Insurance policy, but to get a Life Insurance policy that is the most suitable and in line with their life goals.
It is recommended that your Life Insurance is 10 to 12 times of your annual income, especially if you have people who are financially dependent on you, like your parents, spouse and or kids, or you have loans or other financial commitments. If your Group Life Insurance is not so, then the policy provided by your employer may not be enough and you would need more coverage.
What you will need to keep in mind is that employer-provided Life Insurance is tied to your employment status. Tomorrow, if you decide to change jobs, your Life Insurance coverage could be terminated. However, you can take the policy coverage along with you by paying a nominal fee along with the relevant policy premium. You can check the nominal fee with your insurance provider.
Keeping all of this in mind, it is important for you to determine the amount of life insurance coverage you need based on your needs and life goals. Doing this will give you a fair idea of whether or not you want to solely rely on your Group Life Insurance policy.