While it may be convenient to do so, relying solely on life insurance from your employer can be a bad idea.
Many companies provide a certain amount of life insurance to their employees as a benefit.This can be great in certain situations. However, it can also cause problems when thinking that the life insurance they have through work is all that is needed. Sometimes it may be, but more often than not the coverage may not provide their family with the right amount of protection that is needed.
1. It isn’t really your Insurance
With employee benefits, you are at the mercy of the company you work for — you can work only with the options the company gives you and your ability to keep the policy is dependent on two things:
- Your employer’s willingness to keep providing the benefit, and
- Your continued employment there.
If either of those things change, you could find yourself without coverage. Having your own policy ensures you’ll have coverage as long as you need it and won’t experience any breaks in coverage based on your employment situation.
2. It’s most likely not enough coverage
How much money would it take for your family to cover all of its expenses for multiple years if they no longer had your income coming in? If your spouse is a stay-at-home parent, will they have to start working? Should they have to? Also, who will now take care of all the duties they perform now? Will they do it for free?