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The Importance of Term Life Insurance Outside Your Employer

If you have term life insurance through your employer, that can be a great asset to you. However, it is worth considering that life insurance outside of your employer is equally significant and something you may want to explore. Read on to discover the advantages of exploring your life insurance options. 

What You Get Through An Employer 

Term life insurance offered through an employer is beneficial as a perk of being an employee. It’s offered at a group rate, which often means it’s low cost or perhaps zero cost, which is a huge plus. 

There are some downsides. You’re at the mercy of whoever your employer chooses to go through as a carrier. You’re also subject to premiums going up annually or every five years.

Additionally, there is usually a cap on how much coverage you can get through your employer. For many high-earning individuals, this just isn’t enough to protect their loved ones in the event of a disaster or the unexpected. And if there’s one thing we know we can expect in life – it’s the unexpected.

How To Make It Work For You 

If there is a cap in place on your plan through your employer, or you just feel you need more protection,  you’ll want to seek term life insurance policy(s) outside your employer. By doing so, you can “stack” or “ladder” your life insurance coverage. 

Wondering how to do this? When it comes to this strategy, a common method is to stack 3 different policies. By layering these policies, you can save on your monthly costs. 

That’s because each plan can be broken down by different yearly increments, such as 10, 20, and 30 years, rather than one, more expensive 30 year plan. This is why this strategy is also sometimes called “laddering”. By purchasing policies that expire at varying rates/dates, you create a ladder of coverage throughout your lifetime. 

This can be extremely beneficial when it comes to life insurance, as these long increments of time (often decades) bring with them widely different needs. What you need with kids in the house versus when you’re an empty nester will look completely different. 

When it comes to purchasing the actual policies, you may decide to purchase policies all at once, or “stack” one or more later as your needs change. 

Do your research to compare policies and monthly rates and make it work most advantageously for you. 

Why It’s Important

One more note about the importance of seeking term life insurance outside your employer. It’s essential to consider the current economic climate. The tech industry is currently experiencing widespread layoffs and has historically been volatile. 

Many tech employees who only insure through their employer are in a tight spot and may lack coverage if they get laid off. This is why seeking outside coverage can put you at ease regarding your life insurance policies. And the good news is, it’s easy to shop around to find a good rate for what you need.

Take Charge

When it comes to your financial and estate plan, it’s important to be proactive in setting yourself up for long-term success – which includes planning for the unimaginable. Even if you have a great plan in place by an employer right now, consider shopping around to see what other coverage may be beneficial to you!