Do you have life insurance?
For most of us, the answer to that question might be “Yes, through my employer”. But do you know what the coverage amount is? Many experts recommended having 5-10x your annual income as a general guideline. Unfortunately for many employees, basic life insurance coverage offered through your employer may be only for ONE year salary! That will not go far for the loved ones you leave behind.
There is also the unfortunate chance the life insurance may not pay out.
Prudential Financial, one of the country's largest life insurers, was recently involved in a settlement with the U.S. Labor Department over wrongfully denied benefits. A recent article from the Wall Street Journal said that hundreds of families are facing denials of life-insurance death benefits, despite having paid premiums for years, due to paperwork errors made by their employers. The issue affects policies under employer benefits programs, where the employer handles various administrative tasks, including ensuring employees complete health forms for supplemental coverage. However, in some cases, employers fail to obtain the necessary forms from workers while still deducting premiums and sending the money to insurers. For more information, please read the article here.
This discrepancy can leave “grieving families without the life insurance coverage for which their loved ones paid”, according to U.S. Solicitor of Labor Seema Nanda. Lawsuits by affected families have been brought against several insurers, highlighting the significant impact of this issue on families in need of life insurance benefits.
Adding An Individual Policy
While taking advantage of a free or cheap employer sponsored plan is great, it may not be enough for your family or people who rely on your income (dependents). Getting extra life insurance outside of your employer-sponsored plan offers several benefits that can provide enhanced financial protection and flexibility for you and your loved ones. Some benefits include:
Portability – Employer life insurance is typically tied to you being employed with them. You may lose coverage if you leave the company.
Flexibility and Control – You have the option choose your type of policy, coverage duration, and coverage amount to fit your needs. You also have control with an individual plan.
Competitive Rates – By getting an individual policy, you can potentially access more competitive rates based on your health and lifestyle.
Insurability – With individual life insurance, you can lock in your insurability while you are younger and healthier, ensuring that you have coverage in place even if your health changes in the future.
If you are considering buying life insurance outside of your employer, our team is ready to help you navigate that decision.
Orchestrating Fiscal Harmony™,
Kelly Kunst CFP®
2023 Five Star Wealth Manager
Click here for additional information and disclosures regarding this award program.
Once again, I am honored to be named a Five Star Wealth Manager by Texas Monthly. Nearly 4,000 Dallas-Fort Worth wealth managers were considered for the award; ten percent of these candidates were named 2023 Five Star Wealth Managers. Being recognized is always nice, but the real blessing is serving families and helping them on the path to Fiscal Harmony LLC in their lives.
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