Is the Life Insurance I Have Through Work Enough?

Hand writing Life Insurance and underlining in blue pen

What is group life insurance?

If you have life insurance through your job, that’s technically called “group life insurance.” It’s offered to employees as part of a benefits package, usually along with things such as health insurance and short-term disability. One of the biggest advantages of a group life insurance policy is that it’s low-cost to employees or group members, so you can get coverage at a much lower rate — sometimes even at no cost — than if you were purchasing an individual policy. However, it’s important to look at what type of coverage you’re getting in return and make sure that it’s enough to meet your needs.

Is group life insurance through work enough?

“Something that we see very often is that people don’t know what’s an appropriate amount of coverage to have when it comes to life insurance,” says Scott Limes, life product manager at Nationwide®. “One person may be married with seven kids, someone else might be single and not have any dependents. Everyone on the policy is at a different stage in their life, but there’s not a lot of time or education set aside to look at what is provided.”

Adding to the challenge is the fact that, typically, employees are choosing their group insurance coverage on an annual basis during an enrollment period. They’re making multiple decisions about what kind of health insurance, vision plan and long-term disability insurance they want to include, often without much time or outside information.

“At that point, there’s not a lot of education about how the policy works and what they’re actually getting,” Limes says. “For example, what happens beyond this enrollment time? Are they getting a competitive rate? In some cases, they may be able to get that same amount of coverage for less money.”

When does group life insurance end for an employee?

“A group policy is not going to have the same benefits and support as an individual life insurance policy,” explains Limes. “The biggest thing that we see is that people have a lack of understanding about what that policy offers. If something happens, how much will go to their family? Will it be enough? What happens if they lose their job? These are things that are really important in the long run but oftentimes aren’t discussed.”

Like everything in life, there are pros and cons you should weigh when considering a group life insurance purchase. Most importantly, your group life insurance policy doesn’t move with you if you leave your job for any reason, including if you’re laid off. So if you change employers later in life, it can be harder to get the coverage needed —especially if you develop a health condition.

Steps to take before you enroll

Step 1: Get an estimate of how much coverage you and your family need.

You can use an online calculator to get an estimate of the coverage amount you need. This will help you understand how the money from the policy claim could be used (children’s education, payoff of a mortgage, payoff of high-interest debt, etc.), which affects the amount of the policy you purchase.

“A lot of times, people really underestimate how much life insurance they need,” Limes says. “But the time to learn how much life insurance is really required is always before you need it.”

Step 2: Find out the details for your group plan from your employer. This not only includes the payout amount, but how a claim is filed and how the policy amount is paid out.

Step 3: See if there is a gap in coverage amount based on how much protection your loved ones need versus what the group plan pays for.

Step 4: If there’s a gap in coverage, get an online quote to find out how much a personal policy would cost — either to supplement your group life policy or in place of it.[vi]

Step 5: Work with an insurance professional to review your information and purchase a policy, if needed.

There’s an advantage to working with an agent for your life insurance needs. Not only can they make recommendations, they can also help adjust your coverage as you move into different life stages. In addition, they can help empower you with the right questions to ask your employer about your group life coverage.

“It comes down to being able to know that if something happens to you, the things that are important to you are taken care of. This is about being able to find something that provides a level of coverage that gives you peace of mind about the future,” Limes says.


I Don't Have Flood Insurance. Do I Need It? 

homes surrounded by flood waters

Here are some facts that most people do not realize when it comes to flood:

  1. Floods are the nation’s most common and costly natural disaster and cause millions of dollars in damage every year.
  2.  Homeowners and renters insurance does not typically cover flood damage.
  3. Floods can happen anywhere–More than 20 percent of flood claims come from properties outside the high risk flood zone.
  4.  Most federal disaster assistance comes in the form of low-interest disaster loans from U.S. Small Business Administration (SBA) and you have to pay them back. FEMA offers disaster grants that don’t need to be paid back, but this amount is often much less than what is needed to recover. A claim against your flood insurance policy could and often does, provide more funds for recovery than those you could qualify for from FEMA or the SBA–and you don’t have to pay it back.

If you’re thinking about buying flood insurance, you may want to know a few things before you jump in. Flood insurance is available for commercial, home and property coverage.  There are 3 main components to each policy:

  • Building coverage pays to repair or replace the insured building and its foundation, electrical and plumbing systems, central air conditioning, furnaces and water heaters, refrigerators, stove, built in appliances and most other permanently installed items.
  • Contents coverage provides payment for the contents of your home or building, such as clothing, furniture, electronic equipment, portable appliances, and larger removable items like washers and dryers.
  • Replacement cost is a valuation method for establishing the value of insured property for purposes of determining the amount the insurer will pay in the event of a loss. It is typically defined as the cost to replace the damaged property with materials of like kind and quality, without any deduction for depreciation.

Basic building coverage is available up to $250,000 for home and up to $500,000 for commercial, while basic contents coverage is available up to $100,000 for home and $500,000 for commercial.

When you speak with your agent, you may decide that you need more coverage than is available in the basic plans. If so, you may opt for an ‘Excess Flood Policy’, which covers damage over and above your standard policy.

Clear as mud? Of course it is! We will lead you through the murky waters of flood insurance so that you can see how the pieces fit together and get the best coverage for your money.