Is Your Employer’s Life Insurance Enough for Your Growing Family?
Life insurance provides financial protection for families after a loved one passes away. It gives you the ability to make arrangements for their future while you remain alive, so that you’ll know that they will have financial support even when you are no longer alive to do it yourself.
Many people purchase life insurance and forget about it. After all, dying is not something you want to think about too often. Yet, buying life insurance at a young age and not updating it often leads to situations where you do not have the right coverage for your growing family’s needs. This is especially true if you only have an employer-sponsored life insurance plan. They may not be enough.
What Does Your Employer Offer?
Many employer-sponsored life insurance plans are a flat rate. Everyone gets the same amount of coverage. For example, your employer may offer a $100,000 policy to every employer.
But, is that employer’s offered benefit enough to meet your family’s needs? To answer this question:
Determine how much your family spends every month on mortgages and other types of loans.
Determine if you would like your survivors to pay off your home or other debt in total if you were to die suddenly.
Did you want to pay for your child’s college education or leave money for other purposes? How much will this cost?
If these things are important to you, that $100,000 from your employer’s policy just may not be enough. It may be necessary for you to have more coverage.
Is Your Life Changing?
Next, think about your life as it is right now. When you started that job and received that $100,000 policy, did you have the same types of debts and obligations? Here are a few more things to consider:
Have you had children?
Perhaps you bought a home and now have more expenses.
Have you moved to an area that may have a higher cost of living?
Plus, your long-term financial goals may change over time, too.
All these individual factors play a role in how much insurance you need. They may change over time, too. Adding children to the mix is one change, but conversely as they get older, marry and move out, you may no longer need to provide for their financial needs. As these changes occur, your life insurance policy should follow suit. Your employer’s plan simply might not allow you the flexibility you need.
Work closely with your life insurance agent. Learn about the life insurance options available to you that will offer more financial coverage. You w find it is very much possible for you to secure the financial support your loved ones need. Extending your life insurance does not have to cost a significant amount. But, it is important that the value matches your goals.