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How do I find affordable life insurance for families?

Here's what you need to know...
  • Group life insurance benefits are advantageous to those who are eligible for them, but many policies have benefit restrictions and other limitations
  • Many companies offer employees the option to buy coverage for themselves, their spouses and their children
  • Even people who have group life insurance need to consider buying themselves individual insurance for scenarios where group life won’t pay
  • If you want insurance for cheap on yourself as the breadwinner and your spouse, you should look for special riders that will extend coverage all under the same policy
  • Many individual term life policies also offer the named insured the option to add children’s term life riders to provide a small benefit for the insured’s children
  • When coverage is provided under a rider the company may give you an option to convert the coverage to a separate policy down the line

Employee benefits are becoming a thing of the past. While many larger organizations still offer their workforce the fringe benefits that they want to keep employee satisfaction high, the benefits that are currently offered don’t even stack up to those that were offered in the past. With this being said, when you’re offered group life insurance, it’s best to take advantage of the benefit while you can. Even small death benefits give you financial protection that you don’t have if you opt-out of the employee-sponsored plan. Compare life insurance rates now by using our FREE tool above!

According to the Society for Human Resource Management, about 83% of organizations offer some employer-paid group life insurance in addition to compensation. Out of these employers, only about 55% offer life insurance benefits to the employee’s dependents. Still, only 62% of households who are eligible for group life elect to carry it, and 33% of families say they need more coverage. If you fall into either of these categories, it is time to learn how you can get affordable life coverage for your family.

Why You Shouldn’t Opt-Out of Group Life Benefits

If affordability is your prime concern, you should consider quality policies that come with low premiums. As a consumer with a family, you know that there are ways to find quality products without spending an arm and a leg.

The key is to be resourceful and to do your homework so that you can make informed buying decisions.

There are a few major reasons why employees should always elect to carry at least a minimal amount of group life coverage. If you don’t have any life coverage or you don’t have enough, here are reasons you shouldn’t reject the benefit that you’re being offered:

  • Some or all of the premiums are paid for by your employer
  • You receive special group premiums which are lower than premiums for individual life coverage
  • You may be able to add additional benefits for a small added cost
  • Premiums that you’re responsible for are taken out of your paycheck with pre-tax dollars
  • Keeping your coverage active is easy and convenient
  • If you’re taxed for the fringe benefit through the IRS, the tax obligation will be small
  • You don’t need to pass a medical exam for your policy
  • Pre-existing conditions can’t affect your ability to qualify for coverage or your rates

Don’t Overlook Group Life Drawbacks

Even though it’s in your best interest to carry group life there are still some drawbacks that all employees should be aware of. Group life will always be the most affordable option if you’re comparing apples to apples benefits, but many insurance carriers in the group life industry place restrictions on the coverage. Some of the drawbacks that create a need for individual life coverage:

  • When you buy group life coverage it’s owned by your employer and they can terminate the contract at any time
  • Most employers only allow you to buy up to twice your salary as a death benefit
  • Group life insurance isn’t portable. If you move employers, it’s a benefit that you can’t take with you
  • When you retire, you won’t have coverage and might not qualify for your own plan
  • If you have to buy individual coverage later in life, the premiums will be significantly higher because of your age and possibly your health
  • Some group life plans only provide coverage against accidental death
  • It takes an average of 2 years to settle group life death claims, which is much longer than settlement times for individual policies
  • Some plans don’t offer any riders for your spouse or your children

Buy Individual Life Insurance as a Primary Source of Protection

It’s somewhat shocking to learn that only 44% of households have individual life insurance even though 72% of the households surveyed know they need it. Even if you carry group life, it’s important that you have individual life to save the day if you lose your group benefit. Your individual life policy should always be considered the primary and the group life policy the supplemental.

Shop Around For Affordable Individual Term Life Policies

You can still find affordable life insurance even when you’re shopping in the individual marketplace. The key is to do your homework to find the right carriers and to comparison shop. Here are some tips that can help you find coverage at a competitive price:

  • Shop for term life coverage for an extended period of time to cover your major financial obligations
  • Do your homework and find financially stable companies with a reputation to offer low rates
  • Compare the premium offerings from company to company to find the carrier that caters to insureds in your risk class
  • Choose a smaller death benefit to start and increase the benefit later when you have a higher salary
  • If you’re a member of an affinity group, look for lower affinity discount rates as a benefit of being a member
  • Buy coverage through your auto policy provider for a multi-line discount

Don’t Overlook the Benefits of Riders

Many term life policies come with the option to add special riders to cover other family members without added medical exams and underwriting. If you want to buy coverage for your spouse or your children, it might be possible to add a small rider for additional money.

If you choose these family riders, you can often convert the coverage to a standalone policy while the primary policy is still active.

There are ways to build a family life insurance portfolio without going broke. Start by looking at your group life benefits. After doing this, you can decide how much individual coverage is appropriate. When you know the limits you need you can begin shopping around. Use an online life insurance comparison tool for quick quotes. Once you find the lowest rate, submit your application and get the protection your family needs. Enter your zip code in our FREE tool below to compare life insurance rates now!