Is My Life Insurance Through Work Enough?

You may already have some life insurance coverage through your employer. If so, it’s important to think through how much coverage you currently have, and what you might still need.

The Gist

Group insurance through work has a number of limitations, and the amount of coverage is generally not enough to fully cover your needs.

It is often best to think of group insurance as a supplement to your life insurance coverage needs.

The short answer? Group life insurance through work is generally not enough. Typically, employers limit coverage to 1-2x your yearly salary. For most of us, this amount wouldn’t be enough to cover our family in the long run.

That doesn’t mean group insurance through work isn’t a good deal. If your employer offers free, basic life insurance as a benefit, take advantage of the convenience (and great price). Often, it’s easy to sign up. Many companies don’t require medical exams, and the coverage may be enough, if you are a strong saver or do not have major financial obligations.

But what if you have significant debt or have other people relying on you? You might need more coverage than you think. Here are three reasons to consider buying your own life insurance to make sure you’re covered sufficiently:

Changing Jobs? Poof, It’s Gone.
Just like most employee benefits, life insurance goes away if you are laid off, fired or take a job elsewhere. You’re better off having control over your life insurance. No matter where you work, your life insurance with Ladder moves with you.

Age Rising and Health Declining? The Price Goes Up.
Life insurance is more affordable when you’re young and healthy. As you age, it’ll also become more expensive to get your own. (You can play around with our Quote Tool to see what we mean.) For example, if you develop a health condition and leave your job, it may be nearly impossible to buy life insurance.

Got Your Own Life Insurance? The Price Is Locked.
If you own life insurance yourself, you lock in your price for the full term. It never goes up, even as you get older. And it can’t be cancelled if your health takes a turn for the worse. (Remember, only the insurance price is locked. You are in control of when or if you cancel your coverage and are never locked into a term.)

It’s worth taking the time to find out how much life insurance you really need. Chances are, what’s provided through work is not enough. We’ve streamlined the process of buying your own life insurance, so now it takes only 10 minutes. As your life unfolds—perhaps you get married, have kids, buy a home, pay for college, or care for aging parents—reassess and adjust your coverage. Then, you can rest assured you’re taking care of your people today.