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Group Life Insurance Through Work? What You Need To Know, Part 2

On Behalf of | Oct 25, 2018 | Estate Planning

Last week, we met Charles, a fictional insurance company employee who has a group life policy that, unfortunately, won’t be giving his family the coverage they need. Here’s why.

While getting life insurance through your employer is convenient, cost-effective, and has a fairly broad range of options for those with serious medical conditions, there are some disadvantages to group life insurance.

For one thing, it’s unlikely that you will stay with the same employer for the rest of your life, which could be several decades. It is sometimes possible to modify your group life coverage into individual coverage, but this will increase the cost of your insurance dramatically.

It’s also plausible that your new employer doesn’t offer group life insurance. In that case, you’d have to look into purchasing life insurance on your own, which will get more costly as you get older. If group life insurance is important to you, don’t assume that your new employer will have the same offer as your former employer. Be sure to ask your new employer before you accept that job.

Employer-offered group life insurance is a type of term insurance, meaning it’s offered over a specified period of time. It’s relatively straightforward and is the best option for most folks. If you’re interested in different insurance products, such as whole life or universal life, then it’s wise to talk to a financial advisor. It is also wise to consult with an expert if you have many dependents.

Generally, it’s a good idea to take what your employer is offering if it’s free. At a minimal cost of a few dollars a month, you should still take advantage of the offer. It may not seem like much, but anything you can leave to your loved ones after your passing can be of enormous assistance and bring peace of mind.

That brings us back to Charles. Being well-versed in the elements of the insurance business, you’d think he would have made certain that his insurance was locked down. Perhaps he was a little too comfortable with his familiarity with the industry. His mistake? As he finished up the paperwork in his employee benefits package, he neglected to take the single page that signed him up for group life insurance and turn it over. There, he would have found another place to sign his name and date it. Failing to sign and date that side of the document left him completely uncovered, and resulted in a painful denial of coverage for his loved ones.

Anytime you’re dealing with something as serious as life insurance, be thorough—perhaps even recruit the help of a trusted legal advisor—since little things can go wrong, even for an expert. Take care of your people after you’re gone. And be certain of it.

To set up a free consultation with a certified elder law attorney, please call Kreisher Marshall & Associates, LLC at (570) 784-5211. We take care of all issues on aging in Pennsylvania and have assisted many families with their estate planning.