Many people have at least some life insurance coverage as part of their employee benefits plan. In most cases, group life insurance gives you insurance coverage that’s 1x to 2x your annual salary (which may seem like a pretty sweet deal). If you’re single with no dependents, a sum valued at 1x to 2x times your salary is a big chunk of change. In fact, it’s more than we recommend for our users. But if you have a partner and kids or debts, it usually isn’t enough.
Think about it this way: 1x to 2x your salary provides only one or two years for your family to adjust to a single-income salary. What about the house you bought when you thought two people would be contributing to the payments? And what about all the other lifestyle perks your family has become accustomed to—the vacations, after-school sports, restaurant meals, and outings? Just as it’s hard to adjust emotionally after a family member dies, it can take time to adjust if that person was financially supporting other family members.
Anything else you should know about your coverage through work? One of the main drawbacks of the coverage you get through work is that you lose it if you ever leave your employer. Some of these plans offer options to convert the group insurance to an individual policy upon leaving your employer, but you want to make sure that “no additional medical evidence” will be required. In other words, you want to avoid having to undergo additional medical underwriting again (the reason for this is if you’re diagnosed with any health conditions at an older age, you could see your premiums skyrocket).
