Most people rely solely on employer life insurance, yet many are unaware that they are underinsured by hundreds of thousands of dollars in coverage. While employer coverage can be a fantastic and convenient option, relying on it alone can leave your family unprotected. Here are 5 reasons you should consider additional coverage.

1) The 1x-2x Salary Fallacy

Most employers offer basic coverage with a cap of $50,000 or 1 to 2 times the employees annual salary. Without help from a financial advisor, this seems like great coverage. What many don't realize is that you should have 7 to 10 times your annual income to cover general costs.

Having $50,000 to even $100,000 will go quickly after paying off a mortgage, funeral costs, debts, etc. And if you have a living spouse when you pass, they will have lost about half of the joint income.

2) Lack of Portability

If you ever leave your job, whether by choice, layoffs, or retirement, your coverage typically ends instantly. There are some companies that offer conversion into an individual plan, but your premium will skyrocket when you do so.

The average person changes jobs multiple times in their career, leaving multiple gaps where you are uninsured.

3) The Age and Health Traps

Group rates are based on the average age of the employees in the company. This means younger, healthier employees are overpaying for less coverage than they could get on their own.

If you solely rely on employee coverage while you are still young, but develop a health condition later in life, buying individual life insurance later will be significantly more expensive or even impossible.

4) Limited Customization and Missing Features

Group policies are a one-size-fits-all, they typically offer standard term life with zero additional features.

With the ability to customize your own individual plan, you can add riders such as Critical Illness, Premium Waiver, and Child/Spouse coverage.

5) Tax and Beneficiary Surprises

Employer-Provided Life Insurance over $50,000 creates an excess of coverage that becomes taxable for you.

People often set their beneficiaries during onboarding and forget to make updates as life changes, which can cause legal headaches down the road. Having an advisor help you find coverage means you have someone to remind you when life is busy that you need to make these changes.

Don't wait for a job change or an unexpected life event to realize you're underinsured. To take control of your future now, you can:

• Check your current group policy coverage
• Calculate what your need would be based on current spending and income
• Explore extra coverage to lock in low rates while you're healthy



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