Is Your Employer's Group Life Insurance Enough?

How Group Life Insurance Works

Group life insurance is a benefit offered by many employers, typically providing a death benefit equal to one or two times your annual salary at no cost to you. Some employers also offer supplemental group coverage that you can purchase at group rates.

The main advantage of group coverage is that it requires no medical underwriting — you're automatically enrolled simply by being an employee.

Why Group Coverage Falls Short

If you earn $60,000 and have 1x salary coverage, your family would receive only $60,000 — barely enough to cover a year of expenses, let alone a mortgage, education costs, and long-term income replacement.

Group coverage is typically not portable. If you leave your job, you lose the coverage. This is especially dangerous if you've developed health conditions that would make individual coverage expensive or unavailable.

You have no control over the policy. Your employer can change or eliminate the benefit at any time.

The Smart Approach

View group life insurance as a bonus, not your primary coverage. Purchase an individual policy sized to cover your family's full needs, and treat the group benefit as an extra layer of protection.

Buying individual coverage while you're young and healthy locks in low rates that stay with you regardless of job changes or health changes.