“The Pitfalls of Relying on Group Life Insurance”

​Many folks turn to the Life insurance available to them at their workplace through their group / employee benefits.. click "read more" below to learn about potential pitfalls and things to think about!

The good news is that A) coverage is being obtained, B) IF you’re young it is typically pretty affordable coverage, and C) often medical conditions that would exclude you from obtaining individual coverage outside of work do not apply with group insurance, meaning you can have many pre-existing conditions or be in less than optimal health and still have life insurance. I’m always happy to hear when clients are taking advantage of coverage they have available to them... but there are A COUPLE OF MAJOR THINGS TO CONSIDER before relying on group insurance!

​Herein lies the issue - first of all, when you leave your current job, the VAST majority of the time your policy does not come with you… if it does, it’s going to be a guaranteed issue Whole Life policy at unisex smoker ratings… CHA-CHING $$$$, yikes!! If your new job happens to be with a company with comparable benefits, no big deal… but if your new employer doesn’t have the same options available to you OR if you have some medical issues which prevent you from going out into the marketplace and purchasing coverage on your own, you could be out of luck. The other issue is that every single year you get older the cost per thousand increases, and it is NOT a linear increase! I’ve found that once someone reaches around 40 years of age, typically it’s cheaper to obtain the same amount of coverage on an INDIVIDUAL basis (your own policy, not through group benefits)... and the premiums are locked in / won’t get more expensive as time goes on! 

Now listen, I’m a huge fan of having group benefits put in place… from a business / employer standpoint, it’s a great way to save some money on taxes at the end of the year as well as compete for new employees - just offering group coverage is better than many small businesses nowadays! If you’re an employee, think of group benefits as SUPPLEMENTING the coverage you have outside of work… policies that YOU own that you can customize and tailor as needed. These are just a couple of things to think about during open enrollment or as you’re looking at your group benefits package!

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