• Harry N. Stout

201- I Have Life Insurance Through Work


Written by: Michele Burkholder, Founder of The Burkholder Team

I often hear that when I ask someone if they have Life Insurance. Most people think that Employer Provided Life Insurance is enough to meet their family needs. Is it?


In the early 1900s, companies began offering Life Insurance for their employees. At that time, companies were just beginning to understand the importance of providing benefits for their employees to attract the best talent and to maintain a productive work force. Life Insurance was something that provided security and wellbeing for employees.


Today, an employer will typically offer 1 to 2 times your salary of Life Insurance coverage at no cost to the employee. That’s an amazing benefit. But does it satisfy all of your needs? The purpose of Life Insurance is to:

  1. Pay for final expenses

  2. Cover any outstanding debt

  3. Pay for future expenses

  4. Maintain your family’s standard of living by replacing your income.

If you are single, with no debt, and no one relying upon your income or assistance, 1 to 2 times your salary may be enough. If not, you need to get additional insurance.


What about the additional coverage you can purchase through your employer? If your employer allows you to purchase additional coverage for yourself or your dependents consider the cost. Group Life insurance uses what they call a blended rate. It’s based upon the health of the employee population. If you are healthy for your age, you will pay more than you should. If you are unhealthy compared to your peers, you rate will be lower than what you would pay in the insurance market place. When does it make sense to purchase the additional insurance?

  1. If you are unhealthy and can’t get insurance on your own.

  2. If you can get insurance privately, but the cost is prohibitive.

If you are healthy enough to be approved by underwriting for your own individual Life Insurance policy, outside of work, you should get at least enough coverage to cover the gap from the list I provided above. In addition to covering the gap, buying your own insurance policy will ensure there is no interruption in coverage if you change jobs. Finally, you can find insurance with a fixed cost throughout the term of the policy. The additional employer provided Life Insurance will increase in cost each year since it will be based on your current age.


Make sure you do your homework so you can have enough Life Insurance to meet all of your family and dependent’s needs.



For Educational Purposes Only – Not to be relied on as financial, tax, or legal advice. All investing involves risk and no investment strategy can assure a profit or protect against a loss in a down market. Life Insurance is subject to certain costs, limitations, terms, and conditions not outlined here. All guarantees are based on the claims-paying ability of the issuing insurance company.


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