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Your Financial Life
By Natalie Saar / Sep 25, 2015

How to Take Advantage of Your Company’s Life Insurance Benefits

Take Advantage of your Company's Life Insurance Benefits

Life insurance is a tough topic for some people to confront, but it’s important for everyone to consider. If your company offers it as a part of their benefits package, pay close attention because it could save you time and money.

Why is life insurance important?

Some people gloss over whether they need life insurance or not, but the answer is that no matter if you’re single, married, in your 20s or in your 60s, life insurance is important to have. Your policy will help ensure that if you pass away during the term for which you’re insured, your loved ones are financially taken care of. Your policy can also help make up for around a year of lost wages, should you become unable to work.

What type of life insurance will you receive?

The type of life insurance offered can change from employer to employer, but for the most part you’ll be offered a group term policy along with your benefits. This type of life insurance lasts for a predetermined amount of time while you’re employed with the company, and based on your company’s options; it will likely be the same offer to everyone, which is why it’s called a group term policy. Of course, every individual’s situation is different, and there are specifics you’ll need to discuss when considering signing up.

Should you opt in or get your insurance independently?

Typically, the life insurance policy offered within your company’s benefits will have a very low cost to you, the employee, than if you were to get life insurance outside of what is offered. It’s possible that your family’s needs may not be entirely covered by the policy in your benefits package though. For example, a single unmarried person may not need a policy as robust as a person who is the head of a large household. However, both should choose to have some sort of policy to plan ahead for their loved ones. If you’ve determined that what your company offers won’t be sufficient, then you may want to consult a financial professional and explore other options. Keep in mind that other options may be at a greater cost to you, because a term policy typically has lower premiums than compared with a permanent cash value life insurance policy.

Life insurance is good for everyone to have, so as to not burden their family with any expenses, and possibly even help them in the future. These are the most basic reasons why you should look at the plans offered by your employer.

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