facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog external search brokercheck brokercheck Play Pause
Why Life Insurance through your employer isn't enough Thumbnail

Why Life Insurance through your employer isn't enough


Life insurance offered through your employer can be a valuable benefit, but it may not always be sufficient for several reasons:

  • Limited Coverage Amount: Employer-sponsored life insurance typically provides coverage that is a multiple of your salary (e.g., one or two times your annual salary). This amount may not be enough to meet your family's financial needs if you have dependents, outstanding debts, or specific financial goals.
  • Lack of Portability: Most employer-provided life insurance is not portable, meaning that if you leave your job, you lose the coverage. If you change jobs or lose your job, you may suddenly find yourself without life insurance protection, leaving your loved ones financially vulnerable.
  • Insufficient Customization: Employer-based policies often offer one-size-fits-all coverage, which may not address your unique needs. You may have specific financial goals, like paying for your child's education or leaving an inheritance, which may not be adequately covered by your employer's policy.
  • No Control: With employer-provided life insurance, your employer typically selects the coverage amount and type of policy. You have little to no say in the selection of the policy that best suits your needs.
  • Limited Beneficiary Options: Employer-provided life insurance often limits your choice of beneficiaries, typically to immediate family members. If you have specific wishes for how your insurance proceeds should be distributed, you may not have the flexibility to do so with an employer policy.
  • Tax Implications: If your employer pays for a portion of your life insurance coverage, the premiums paid by your employer may be considered a taxable benefit. This means you could end up paying taxes on the value of the coverage.
  • Temporary Coverage: Group life insurance provided by employers may not provide coverage for your entire working life. It typically ends when you retire, and the coverage amount may not be sufficient during retirement years.

Individual life insurance allows you to tailor your coverage to your specific needs, offers portability, and gives you greater control over policy decisions. It ensures that your beneficiaries are financially protected according to your wishes, regardless of your employment status. Before making any decisions, it's essential to assess your financial situation, evaluate your needs, and consult with a financial advisor to determine the appropriate amount and type of life insurance for you and your family.

To schedule a meeting, visit us at royalroadwealth.com or contact us at info@royalroadwealth.com.