Do I Need More Than One Life Insurance Policy?

The average American consumer is finally beginning to understand the importance of owning a proper life insurance policy. However, the truth is that most people settle for the life insurance policy that they are given through their employer. While an employer-provided-life-insurance policy is a great place to start, the average American should really consider adding a private life-insurance policy to their portfolio as well. Let’s take a closer look at why.

Amount Of Coverage
While an employer-provided-life-insurance policy is a great idea, it’s not without its issues. Most notably, employer life insurance tends to not offer enough actual coverage for the average American. Employers typically offer life-insurance policies that offer coverage in multiples of your salary. If you have an entire family depending on your income for their livelihood, a few multiples of your salary is probably not going to be enough coverage to help out in the long term.

The Bureau of Labor Statistics reports that the average American with a life insurance policy through their employers has coverage of about $200,000. That money can go incredibly quickly. That’s why it’s usually advisable to find a second private life-insurance policy to help bring your coverage up to a reasonable amount.

Riders
If your life insurance policy is through your employer, you probably are not able to add riders to your policy. For those who don’t know, riders are additional terms and conditions that are designed to enhance cover in certain situations. For example, some riders will allow you to collect on your death benefit early in the event of a terminal illness, or add an additional benefit in the event of the death of a spouse.

Policy Travel
Gone are the days of employees staying with the same company for 30 years. The modern worker goes through numerous jobs throughout their career. This can be a big problem if you are relying on your employer for your life insurance policy. That’s because most employer-provided policies don’t allow you to take it with you if you leave the company.

Now, it is true that some policies will allow you to keep it as long as you take over the payments that your employer was previously making. However, those payments are normally much higher than they would be if you had just gotten an individual policy on your own.

Term vs. Permanent
If you get a life insurance policy through your employer chances are high that it’s a group life insurance policy. Group life insurance policies are term, which means that they expire after a predetermined number of years.

Term life insurance is often recommended because it’s cheaper than a permanent policy. However, as you become more fiscally successful, it’s very likely that you’ll want a permanent option to provide for your family after you’re gone. That usually requires a private policy.

It seems as though most Americans finally understand the importance of a life insurance policy. It’s crucial that more people also understand the limitations of an employer-provided-life-insurance policy.

To learn more about your current insurance policies, or to inquire about any new ones, we encourage you to reach out to TGS Insurance. The TGS staff are always ready and willing to help you find the right policy for your lifestyle. Visit www.tgsinsurance.com to learn more.

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