Workplace life insurance is a group life insurance that is provided by your office as a job benefit. The ownership of this policy belongs to your employer and you don’t have to pay any premiums in most cases. It provides guaranteed coverage and you are automatically enrolled for it but in some cases, you must wait to sign up for the policy. All your coworkers get this policy that is why it is called group policy and each member gets the same benefits no matter what their health condition is. No medical exam is conducted, and you can enjoy the same rates as others even if you have good health or not.
The coverage amount for workplace life insurance usually covers your annual salary or twice of it. Most of the time this workplace life insurance is provided as a job benefit, so you get it for free and that is the best thing about it. You can also cover your family besides yourself in this life insurance. But, as everything comes with some pros and cons, workplace life insurance also has some downsides that cannot be ignored. Insurance coverage from work cannot be enough for you especially if you own a house or have kids.
When you have to decide if you should get the workplace life insurance or buy separate life insurance from an insurance company, you must know how much coverage you need in your life insurance. Workplace insurances often provide very little coverage and it can depend upon your status if you are single, married or have children. If you completely rely on group life insurance, you may underinsure yourself and your family. If your policy is too small, it might not cover all the expenses of your funeral, your kids’ college fee, or their living cost.
You can learn more about group life insurance here – https://citadelfinancialwealthgroup.ca/group-insurance-plans/
and personal health insurance here – https://citadelfinancialwealthgroup.ca/personal-health-insurance/
Here are a few things that are compromised when you get workplace life insurance.
1. You Might Not Get Enough Insurance Coverage
Usually, group life insurance provides very small coverage that is not enough to rely on. The supplemental coverage you get to fill that void can be very expensive and ruin results, the workplace insurance can be more costly. So, the better option is to get life insurance from some insurance companies at cheap rates. Your needs may not be fulfilled by that insurance because the offered coverage is limited.
Most companies offer coverage equal to the annual salary of their employees or twice of it, but it is not enough to cover the expenses of your family after your sudden death. Workplace insurance can be enough if you are single, but people with a family and children cannot get enough from just this insurance. Also, homeowners must get a separate policy for their life insurance.
2. The Coverage will be affected in Case You Get a Different Job
Another problem that comes with workplace insurance is that if you get a new job and lose this one, your coverage can be lost. Mostly, the employees have no idea what will happen to their life insurance if they resign this job, the business shuts down or if they change their status in the company.
In any condition like this, you can miss your policy and if you try to upgrade this policy, it may cost you a lot of money. In such a case, buying separate insurance is a better option for homeowners and people with families. You can easily find a cost-effective insurance plan from an insurance lender outside your office and enjoy a cheaper policy.
3. Status of Your Health Can Affect Coverage
If your health is declining and you need group insurance, but you have to leave the job due to your condition, a problematic situation can be created. As a pro, this insurance allows you to get the same benefits as other employees no matter what your health status is, but the con is that if you lose health, you will have to leave your job and the insurance policy will be of no use.
So, consultants usually recommend you to get complete life insurance from a company instead of relying on your group insurance. You will lose your group insurance coverage right when your family needs it the most because you would have to leave the job due to your health issues. Even if your health status does not force you to leave work, it may limit your working options if you are relying just on the group insurance.
You may end up being chained to your current job just to save the insurance coverage even in the worst health condition. You have no control over the insurance company that will lend you coverage in case of workplace insurance, they can choose a low rated company to save money and you might end up being in a greater problem.
4. Your Coverage is not enough for Your Family
If you are married, you might want to get insurance for your spouse, but the workplace insurance plan might not cover that factor. Your partner can get health insurance, but they won’t get life insurance. Even if they do provide life insurance, it won’t be more than $100,000 and it will do nothing after the loss of their better half.
The family does not only suffer financially, but it is a matter of emotions, you can’t go to work the next day when your spouse dies, make sure that you get a paid time off (PTO) for an extended leave. You can often lose productivity when you lose your partner, all the chores are burdened on one individual, and in that case, a good insurance policy can be a helping hand.
There is a big chance that you might end up having expensive insurance from the workplace, so we recommend getting a separate insurance policy for yourself especially if you own a house and have a family. Consult an insurance advisor and discuss your case in detail to get the best policy as it is a matter of your family’s protection.
By using insurance or a financial adviser from Citadel Financial Wealth Group, you will be able to ask all the questions you have and be ensured you get the best advice and mortgage product for your mortgage needs. Contact Citadel Financial Wealth Group were they make insurance, investment, and banking simple.
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