You might need to obtain supplemental life insurance at some point because sometimes, your employer’s coverage may not be enough.
You might need to obtain supplemental life insurance at some point because sometimes, your employer’s coverage may not be enough. It adds an extra coverage layer to an existing policy, and it includes the following:
- Life insurance for a child or spouse
- Coverage you bought besides your basic group policy
- Coverage that pays out if you are seriously killed or injured in an accident
Keep reading to know how supplemental life insurance works.
Four Types of Supplemental Life Insurance
- Supplemental employee life insurance provides coverage for your policy
- Voluntary spouse life insurance covers your spouse or, in many cases, a domestic partner
- Supplemental child life insurance protects eligible dependents
- Supplemental accidental death and dismemberment insurance works if you die or you get injured in an accident
How Much Coverage Do You Need?
To determine how much life insurance you need, you need to ask yourself these two questions:
- How much do others depend on your income?
- Is your current group life insurance policy enough to cover those costs?
The amount you need depends on the costs your income covers, for instance:
- You have a child or care for an aging parent
- You get married and want to protect your spouse from sudden expenses if you pass away
- You purchase a home and require additional coverage for potential mortgage payments
- Your spouse is no longer earning an income, so you become the primary source of income for the family
- Your monthly expenses increase, needing additional coverage
- You need coverage for future college fees for your child
What is the Cost of Supplemental Life Insurance?
The cost of supplemental life insurance depends on where you work due to how insurance companies calculate group life prices. This data differs for each company so that premiums can vary significantly. Fortunately, this can work in your favor if you are older or have a medical condition. The group rate might be lower than if you purchase your coverage.
Generally, rates for supplemental life insurance plans through work are not fixed. This means premiums may increase with age. If you purchase standard term life insurance on the open market, the premiums don’t change for the policy’s duration, regardless of the health conditions you may develop along the way. Therefore, you may be better off purchasing life insurance through a private insurer if you are younger. This way, you can take advantage of the lower rates.
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Are you a business looking to provide your employees with essential voluntary benefits? If so, look no further than The MWE Partnership. When you choose The MWE Partnership, you get experienced service and comprehensive voluntary benefit options that will meet all your employees’ needs. With over 17 years of experience, The MWE Partnership is your go-to provider for all your supplemental benefit needs. If you are interested in finding out how The MWE Partnership can help your business, contact us today! We encourage you to like our Facebook page and follow us on X and LinkedIn for the latest voluntary benefit news!