Do you have enough life insurance coverage? You might not have enough coverage through your life insurance from work. According to a recent LIFE Foundation and LIMRA Study, almost one third of all Americans believe that they need more life insurance coverage.
LIMRA, a worldwide association of insurance and financial services companies, recently found that about 40% of people own a life insurance policy only purchase it through their employer. They do not have any other policies. There are a few issues with only buying life insurance from your employer. You may not have enough, there could be limitations, and other issues.
Most people are underinsured. They are not receiving enough coverage for their life insurance from work and their employer. You may need to add more life insurance. But, how much more life insurance should you buy?
You Need 10x Your Income
If you are like me, your life insurance from work does not provide enough coverage. I have a group life insurance policy from my employer that only covers approximately half of my annual income. This isn’t enough coverage.
Take back control of your finances!
Get a FREE checklist for the money moves to make in the New Year.
Also get new articles, advice, and tips delivered right in your email inbox with our newsletter!
Most financial and insurance experts recommend that you need to have life insurance benefits that pay out at least ten times your annual salary. So, for example, if you earn $50,000 per year before taxes, you should have enough life insurance coverage that would pay your beneficiaries $500,000 upon your death.
The problem is that most workers are not covered by their employer’s life insurance plan for the total 10x their income amount. So, they must find supplemental life insurance to add to the amount of life insurance from work. It is not the end of the world, but it is something that employees must recognize and a financial issue that must be tackled. Do not let this “To Do” item linger on your list.
Shop Around For Life Insurance
So, what is the best way to find life insurance if you are not getting enough life insurance from work and your employer? You should shop around for additional life insurance policies. When was the last time you called a life insurance agent to get a quote? Have you received a phone call from an old college classmate who has changed careers and become an insurance agent? Maybe now is the time to call him back and shop around for additional life insurance.
Additionally, you can find great additional life insurance policies online. You should compare life insurance online to find the best deals. It is free and very quick to receive several quotes on new life insurance policies. In most cases, you do not even have to input your email address or phone number in order to get a quick idea as to how much life insurance you could qualify for and what its tentative costs would be. Using online tools is a great resource to get ideas and quotes about new life insurance.
The website, CoverPath.com, recently came out with a free online tool that helps employees figure out how much life insurance that they should buy through their employer’s plan and how much they should add on their own through an additional life insurance policy. Cover Path’s online tool provides a transparent and easy to use way to help people make a more informed life insurance buying decision. It provides you with a quick snapshot of whether or not you have enough coverage, if you should get more, and can even provide you with some recommendations on where to turn next.
Don’t Let Your Perceptions Hold You Back
The LIFE Foundation and LIMRA survey also find that we have some misperceptions that are holding us back from getting the additional amount of life insurance that we need. The survey found that a vast majority of Americans thought that life insurance was too expensive. Because we often think that we cannot afford life insurance, we quickly dismiss it without another thought.
But, the reality couldn’t be further from the truth. The worry of high cost should not be a factor because it simply isn’t true. In fact, the cost of many term life insurance policies have been coming down over the past decade. There are many term life insurance policies where a healthy, non-smoker can find premiums as low as $10 to $20 per month for almost $500,000 in benefits.
Do not let the fear of high prices hold you back from purchasing additional life insurance coverage. The costs of term life insurance premiums are very low with respect to the amount of coverage that you can buy.
Do you have life insurance questions? Do you have enough coverage through your life insurance from work? I’d love to help. Send me an email Hank [at] MoneyQandA.com or leave a comment below.