What You Need to Know About Employer Provided Life Insurance

Life and Financial specialist, Criss Crombie, explains the pros and cons to employer provided life insurance. Moreover, he gives some great advice to ensure you remain covered no matter where you work! Watch the video below!

Group Plan + Stand-Alone Policy

Employer provided life insurance is great because it’s little or no cost to you. However, one of the problems is if you leave your job the life insurance is typically not portable, meaning you have to start all over again when you start your new job. It’s important to have both employer-provided life insurance if it’s available because it’s no cost, as well as a stand-alone life insurance policy. With a stand-alone policy, you’re going to have it no matter how many times you change employers.

One of the things I tell prospective clients is that we change jobs a lot. We really don’t stay at our jobs for very long – maybe two to five years or seven years at most. So what happens if you have your group coverage only and then you leave but you don’t have benefits through your new employer? What if your health declines and you can’t get life insurance after you leave your group? These questions are important to ask yourself. You really must consider having a stand-alone policy in addition to your group coverage.

Portable vs. Convertible

Some people ask, “What happens to my group insurance after I leave my employer?” Sometimes it’s portable, which means you can take it with you. Most of the time though it’s convertible, meaning you have to convert it to a permanent type of life insurance, which is three to four times more expensive than what you were paying with your group plan. If it’s portable, that means you can transfer it as is. So if it’s a term policy, you get to keep it as a term policy, but your premiums are going to go up every year substantially. After five years, it may be affordable.

Since insurance is oftentimes overwhelmingly confusing, we want to shed light on this industry by answering your questions.  So if you have any questions or concerns, comment below and your question may be the topic of our next video!

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