Is Employer Sponsored Life Insurance Enough? – Compass Insurance Advisors
  • Estimated reading time: 2 minutes

    Is your employer provided life insurance coverage enough? 

    Many companies offer life insurance as an employee benefit, but these policies may only provide a fraction of the coverage you actually need. 

    Spoiler: It’s probably not enough

    Employer-sponsored policies typically offer coverage that is about 1-2X your annual salary. However, financial experts recommend having coverage that is about 10X your salary. That can result in a large gap in protection if you’re solely relying on your policy through work.

    Think about all of your family’s expenses (mortgage payments, childcare, college tuition, living expenses) and ask yourself: Would my coverage through work be enough to take care of my family if I passed away? If not, you may want to consider buying a policy to supplement the coverage you have through work.

    Leaving your company? 

    Whether you change jobs, retire, or are laid off, when you leave the company, you may have the option to take your employer-sponsored policy with you. However, you’ll likely lose the pricing benefits provided by the employer, leaving you overpaying for insufficient coverage. That’s why in most cases, it’s advantageous to forget your employer-sponsored policy and apply for individual coverage. 

    Make sure your loved ones are protected

    Many people decide to buy an individual policy in addition to, or in place of, their policy through work. 

    Lock in your lowest price 

    Life insurance rates can increase as you age and if your health declines over time, you will have a higher likelihood of being denied coverage – so applying sooner means you can lock in your lowest rate. 

    Get the coverage your need 

    It’s worth taking a few minutes to determine how much coverage you need to protect your family. Looking for a simple way to give you a general idea of what you need? Multiply your annual salary by 10. If you would like to see a more detailed estimation of your insurance needs, try our coverage calculator.

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