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What Does My Employer-Based Insurance Actually Cover?

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What Does My Employer-Based Insurance Actually Cover?

You may think that you are all set with your insurance coverage due to the employer-based life insurance policy that you have, but how much do you actually know about your policy?

While some exceptional companies offer great insurance policies for their employees, most employer-based insurance policies don’t suffice on their own.

While your employer-based life insurance policy may be a great supplemental policy to have along with other life insurance coverage, it is typically not advised to rely solely on employer-based insurance.

Here’s why:

You’re Likely Paying More, For Less Coverage

With the typical insurance policies provided through employers, the amount of coverage you will receive is limited. You may think it is sufficient, but it likely isn’t if you consider the amount of insurance you will actually need in case of emergency, or to provide your family with a decent death benefit.

Now, while the coverage is limited, your premium rates won’t match the low benefits you’ll receive. You’ll likely be overpaying on your premiums, only to receive a lower benefit in return.

Don’t make this mistake. Instead of simply residing with the life insurance options your company has offered you, look into all the other individual life insurance policies, and only use the employer-based insurance to supplement it if needed.

You May Be Covered, But You Can’t Get Benefits For Your Family

Often times, the main issue with employer-based insurance is that the employee gets covered, but the family members do not receive enough coverage. So if an employee’s spouse suddenly passes away, they may not have enough money to cover all the costs from medical bills, and funeral expenses. This leaves the employees in tough financial situations, causing them to have to return to work to continue getting money, without allowing for enough paid-time-off to grieve and deal with the loss. As if losing a loved one isn’t already hard enough, the stress of not being able to stay afloat taking care of things, and providing for the family afterward is extremely horrifying.

Your Employer-Based Insurance Is Likely Term Life Insurance

While term life insurance can be beneficial to some people, depending on their situation, most individual benefit more from a permanent life insurance policy. With a permanent life insurance policy, you will get more benefits, and spend less money in the long run. You will also receive more coverage, in fact, lifelong coverage, whereas term life policies may be outlived and then you will be left trying to extend your policy, or find another one, both options costing you more money than the original policy. While this type of employer-based insurance can be a great supplement to your permanent life insurance policy, it is not typically sufficient to rely on, and can leave you spending more money in the end.

Your Insurance Policy Is Dependent Upon Your Position With The Company

Do you know what happens if you quit, or get sacked? Unfortunately, with many companies, your life insurance is cut off, or cut off after a small extension of about 6 months to a year. This can leave you uninsured and out of luck. While you can seek insurance elsewhere, your rates may now be higher since you initially started this job, and your unemployed status may make it harder to pay your premium rates. In the worst case scenario, if you had to quit, or lost your job because you were extremely sick and could not continue working, you will no longer have the coverage, the income, or the ability to get good insurance with your health status. So before you rely on your employer-based insurance, consider your job security and prepare for the worst, just in case.

These are all things you should consider before investing in, and relying on your employer-based insurance. Before you make any decisions, just make sure your family will be covered and that you are not skimping on your life insurance choices.

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