Reasons to Consider Additional Insurance Coverage to What Your Work Provides
BY: VESELINA DZHINGAROVA ON MONDAY, MARCH 07, 2016
The notion of insurance during early adulthood can seem like a trivial concept. Only once individuals begin to consider their own mortality does the concept of insurance begin to seem like a valuable and necessary commodity. Many people not only receive some form of health insurance through an employer, but also obtain some level of term life insurance coverage. As people age, the concern of whether enough coverage exists to guarantee security and peace of mind for themselves and their families becomes greater. Even if you already have term life insurance through your employer, there are plenty of reasons to consider additional forms of insurance coverage. Below, we'll discuss these reasons.
Many employers offer basic term life insurance coverage as a basic amenity and benefit of employment. This coverage is often either low-cost or free, but such a situation comes with obvious considerations. In many cases, the level of coverage provided is not sufficient in terms of face value to cover all of the potential final expenses. While the amount may vary from person to person, the ideal amount of sufficient term life coverage to protect families in the event of early death should be anywhere from five to ten times that of the individual's annual earnings. As such, it is very important to carefully consider how much your employer term life insurance provides, and to evaluate all potential forms of annual income (commissions, bonuses, etc.) when calculating the necessary amount.
Lack of Guaranteed Coverage
Most employers' free or low-cost term life insurance only covers the individual when or if he or she is employed at the time of an accident. If an employee suddenly loses his or her job or otherwise begins looking for another employment opportunity, then the term life coverage may no longer apply. As such, it often makes sense to ensure that consistent and guaranteed coverage is maintained – regardless of employment situation. With so many unexpected situations in life, nobody wants to leave a spouse or children without coverage due to a rapid series of events that results in no coverage and accidental death.
Critical Health Concerns
Term life insurance becomes quite unaffordable – or unattainable at all – once a person's health deteriorates. Additionally, some employer-based term life insurance becomes diluted or nullified entirely when serious health issues enter the picture. As such, assessing the situation and procuring reliable term life insurance policies outside of what an employer offers may be the only guarantee that term life insurance will be available. Since many insurance policies lose value as someone becomes older and sicker, carrying additional coverage can help bridge the gap in any losses due to health or illness.
Other Forms of Insurance to Consider
Term life insurance isn't the only form of guaranteed coverage individuals can consider to preserve a standard of living. One example of additional coverage is critical illness insurance, which provides assistance to individuals while they are still alive and in instances in which conditions such as heart attacks, strokes, certain types of cancer and a variety of other illnesses strike. If illness or disability strikes, then it is also possible to preserve a standard of living through income protection insurance. This pays a percentage of take-home pay and covers the majority of illnesses that someone from returning to work.
Those with term life insurance policies may already feel prepared, but the initial coverage provided by employers may not be enough. By assessing existing levels of coverage, factoring in annual income, determining which factors might disqualify coverage and preparing for critical illness, an employee can significantly reduce the likelihood that future death or injury will impact themselves or family members beyond recovery.
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