
Group Life Insurance: Is It Enough?
Many employers offer group life insurance as part of their employee benefits package. While this is a convenient way to obtain some life insurance coverage, it’s important to understand that it may not be enough to fully protect your loved ones in the event of your untimely death.
Why Group Life Insurance Might Not Be Enough
• Limited Coverage: Group life insurance policies often provide a modest amount of coverage, typically a multiple of your annual salary. This will likely not be sufficient to cover significant financial obligations like mortgages, debts, lost income, and future education costs for your children.
• Portability Issues: When you leave your job, your group life insurance coverage usually ends. While some employers may allow you to convert your group policy to an individual policy, this can be costly and may not offer the same terms and conditions as a newly purchased individual policy.
• Lack of Flexibility: Group life insurance policies are typically one-size-fits-all, offering limited customization options, and no choice of carrier. You may not be able to adjust your coverage amount or term length to meet your specific needs.
• Increasing Premiums: Group life insurance premiums are not guaranteed and can increase over time
The Benefits of Personally Owned Term Life Insurance
To supplement your group life insurance and ensure your loved ones are financially protected, consider purchasing a personally owned term life insurance policy. Here’s why:
• Tailored Coverage: You can choose a coverage amount and term length that aligns with your specific needs and budget.
• Portability: Your policy remains in effect, regardless of changes in your employment status.
• Convertibility: Many term life insurance policies offer a convertibility option, allowing you to convert your term policy to a permanent policy without undergoing a medical exam, provided you do so within a specified timeframe.
• Fully Underwritten: With a personally owned life insurance policy, you can rest assured that your policy is fully underwritten and guaranteed to pay out upon death.
• Additional Benefits: Some personal life insurance policies, like those offered by Manulife, include additional perks such as the Vitality program. These programs can offer rewards and discounts for healthy lifestyle choices, further enhancing the overall value of your policy.
By combining group life insurance with a personally owned term life insurance policy, you can create a comprehensive life insurance strategy that provides peace of mind for you and your family.
Group life insurance can be a valuable part of your financial safety net, but it’s important to understand its limitations and consider the idea of supplementing it with additional coverage. By reviewing your coverage, assessing your financial situation, and seeking professional advice, you can take steps to ensure that you are adequately protected, giving you and your loved ones Space to Breathe. If you’d like to review your group insurance, book a meeting with one of our advisors to get started.
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