Do You Need Extra Life Insurance Outside of Work?

Some individuals have the opportunity to have life insurance provided for them. It may be through their workplace.

What is Employee Life Insurance?

Employee

There are many different industries in Canada that employee many different people. Some of these companies offer benefits. These benefits can vary. Sometimes they will include employer paid life insurance. Or, they may be employee life insurance that comes with shared costs. The employer will pay a percentage of the premiums. The employee pays the rest.

What Does the Employee Life Insurance Provide?

Where one works is going to determine this. Companies make deals with Insurance Companies. Deals that allow them to get better rates based on volume. It is usually a group insurance policy that has been arranged. There will be specific types of coverage that this type of life insurance may pay out. At the very least there should be a set value as it pertains to the coverage. For example, it may be a basic life insurance coverage for $50,000. value. Meaning that the insured under this policy would be able to name a beneficiary. One that would receive that amount of money. In the event that the insured died.

Is Company Life Insurance Enough?

Life insurance is a personal type of product. There are a lot of individuals who do not realize this. Some think that life insurance is the same for everyone. An individual chooses how much coverage they want. Then the insurance company tells them how much it will cost. This is the way it gets done. But, the amounts that each person may pay for the same coverage is different. Work life insurance works a little different. Each worker needs to look at the coverage that is in place. Then ask themselves if this is enough to give them peace of mind for financial protection. For their loved ones. Again, because every individual has different needs the answer whether it is enough will vary. It will depend on many different factors.

Work Life Insurance Coverage

Work

Most employers that are offering life insurance to their workers will base it on a few factors. They like to make sure there is enough insurance in place double the salary. This sounds like a lot of money being as it would equal about two years pay. The worker needs to determine is that enough coverage for their loved ones? It needs to get looked at realistically. It may seem like the beneficiary is going to get two years worth of pay. But, quite often it is the spouse who is the beneficiary. Often there are children left who need caring for. If the insured has a lot of debt, the spouse may be obligated to pay this debt upon the death of the insured. The two years worth of salary can be quickly used in cases like this. Which are common cases.

What Happens When Employment Changes?

Another common occurrence is that individuals leave one place of work and go to another. Then what happens to the life insurance? The previous boss does not continue paying it. In some instances, the work-life insurance can get transferred over. To the insured as private life insurance. When this happens most likely, the terms are going to change. Now the individual has to pay for it. They may have no idea what this cost is going to be. It might be that they could get a much better deal on life insurance. By buying their own policy that they have shopped for.

Break in Work

There are times when individuals become ill and are away from work for a period. What happens with the work insurance then? One needs to know if there is some type of agreement in place. One where the company will keep paying the insurance premiums. If they don’t then it may be up to the worker to continue with the payments. This can create a tough situation. If the worker is ill, they are not making their regular income. Money can become tight. How can they afford to take on the extra payment for the premiums?

It may even create a worse situation in this circumstance. If the insurance lapses, it may be very difficult to get new insurance. Or to get the work-life insurance re-instated. Now that the insured has a health problem it may be difficult for them to quality for new life insurance. Or, if they do the premium costs are going to be high. Also, they may get limited to the amount of insurance they will be able to buy.

Additional Coverage

Another common work life insurance situation is who gets covered? In many cases when it comes to work-life insurance, only the employee gets covered. Not their spouse or family. This means extra insurance outside of the workplace has to get purchased for them. This is probably going to be more expensive.

A Better Solution

protect your family

Having life insurance paid for you is a benefit no matter how much the value is. Or what the restrictions are. But, it may not be enough to meet your needs. Your needs are making sure that your loved ones get protected financially in the case of your death.

The first step is to determine how much insurance do you think you need to have to protect your family.

Next, determine if your workplace insurance is able to provide this amount of coverage.

Then make sure that all the potential negative aspects outlined here are not an issue.

This type of analysis may lead you to determine that you do not have enough life insurance. You have a great opportunity to buy more insurance on your own. There are plenty of life insurance companies in Canada to buy life insurance from. Plus, there are many different options when it comes to life insurance packages. You can buy the extra that you need and supplement the coverage you have now.