Relying on the life insurance offered by your employer as your sole source of life insurance can be risky. There are several reasons why employer life may not be the best option. Many times employers offer a limited amount of life insurance and this may not be adequate for your family. Also, there is no guarantee that your employer will continue to offer the life insurance in the future. And, if you leave employment many times you cannot take the life insurance with you. It’s a wise decision to take your life insurance needs into your own hands and secure and guarantee the coverage that you need.
How Much Life Insurance Do You Need?
To find the right amount of life insurance coverage you must weigh your dependent’s lifestyle needs, outstanding debt and future spending needs vs. their future sources of income and assets. An insurance agent can help you determine how much your family will need should something happen to you.
Types of Life Insurance
There are two basic types of life insurance; Term Life Insurance and Whole Life Insurance. Term Life Insurance is likely the most popular and cost effective type of life insurance. Term life covers you for a specific period of time for the death benefit amount that you choose. There is no accumulation of cash value with term life and coverage is very inexpensive.
Whole Life Insurance combines Term Life Insurance with a long-term, tax-sheltered savings plan. It provides lifetime coverage and builds cash value in which you can borrow against or use to pay future premiums. Whole Life Insurance is ideal for those who not only desire the life protection but want the ability to build tax-deferred cash value as well. Premiums for whole life are stable over the life of the policy however they are more costly than term life insurance.
Regardless of the type of life insurance that you choose, purchasing your own life insurance is a wise choice. By purchasing your own life insurance you choose the appropriate death benefit, you control the term and the future of the coverage and regardless if you are employed or not you own the policy and the coverage remains. Too many people rely on the life insurance offered by their employer and this is not a good idea. Take your life insurance needs into your own hands vs the hands of your employer and get the protection that you need. Adequate life insurance will give you peace of mind and will provide for your loved one’s needs.