iQuanti: Many employers offer low-cost life insurance as part of employee benefits. However, these do not always provide employees with sufficient life insurance, especially those with families. According to LIMRA’s 2021 Barometer Study, 22% of life insurance owners think they need more coverage.
Fortunately, employees can purchase additional life insurance policies outside of their jobs with private insurers. This article will dive into several life insurance policies you can research for outside work and explain why you should consider life insurance with cash value so you can get coverage that meets your needs.
How does employer-sponsored life insurance work?
Employer-sponsored life insurance is also called group term life insurance because it provides low-cost term life insurance to employees. The employer pays most or all of these premiums. These can be a great starting point, but employers usually don’t offer more than
Life insurance policies to consider if your coverage is not sufficient
If your employer-sponsored insurance policy isn’t enough and you want a policy you can take with you wherever you work, consider the following types of policies that may provide a death benefit much higher:
Term life insurance
Term life insurance lasts a fixed number of years, usually 10 to 30 years. If you die during the term of the contract, your beneficiaries can receive a large death benefit to replace your income and pay off your debts.
Whole life insurance
Whole life insurance is a form of permanent life insurance, which means the coverage lasts for life, although the premiums are higher than term life insurance. Whole life insurance is also a form of cash value life insurance. A portion of each premium goes into this component, which grows tax-deferred at a fixed interest rate.
When your cash value gets big enough, you can borrow at a low rate without a credit check, withdraw from it, or surrender the policy and get the full cash value minus the surrender charge.
Universal life insurance
Universal life insurance is a permanent policy that allows you to adjust your death benefit. You can increase it, subject to a new medical examination and a premium increase. You can also reduce it to lower your premiums. You can use your cash value to pay premiums once you have accumulated enough.
End-of-stay expense insurance
Final expense insurance is a small whole life insurance policy designed to cover end-of-life expenses, such as medical care and funeral expenses. Premiums are much lower than for a standard whole life policy and you don’t need to pass a medical exam. Just keep in mind that the death benefit is also smaller. These policies also have cash value growth features.
Get the coverage you need
Work life insurance coverage can be attractive early in life, when you don’t have dependents and want to cut costs. However, many employees find that the
Term life insurance may be the best option if you want to keep costs low, as long as you’re okay with the possibility of the policy expiring before you die. On the other hand, permanent life insurance policies like whole life, universal life, and terminal expense insurance provide peace of mind with guaranteed coverage and allow you to build wealth with a redemption value. When determining which policy to get, be sure to weigh your coverage needs against your budget. From there, research multiple quotes to find a policy that offers the best rates on the coverage you need.
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