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Should You Purchase Supplemental Life Insurance?

If you have a full-time job with a company in Arizona, your employer likely includes life insurance as part of your benefits package. However, this insurance may not be enough to fill your unique needs. If this lack of coverage is an issue for you, you may need to consider purchasing supplemental life insurance.

What Is Supplemental Life Insurance?

If you have life insurance through your employer, you should take advantage of this plan. If you opt for private life insurance, you will have to undergo a medical evaluation to obtain insurance and determine your rates. However, employer-sponsored life insurance can offer coverage to you without the exam even if you could receive a rejection through individual plans.

In many cases, company life insurance is not enough to cover your needs. Many company policies have an option to purchase additional coverage or you can buy your own supplemental life insurance. This insurance is similar to your group insurance policy, but offers limited coverage.

Usually, supplemental life insurance covers specific needs.

• Accidental death and dismemberment insurance can help cover you if you are in a serious accident and die. Some policies even provide a payout if you suffer a serious injury and you do not die, such as if you lose a limb, eyesight, or hearing.

• Spouse or domestic partner insurance allows you to provide protection for your significant other. In many cases, this policy can complement your existing policy.

• Burial insurance can help your family cover your burial and funeral expenses in the event that you die suddenly. Usually, this form of supplemental insurance can offer between $5,000 to $10,000 in coverage.

When Should You Purchase Supplemental Life Insurance?

Company life insurance policies usually adopt a “one size fits all” mentality when it comes to the amount of coverage you receive. These plans typically do not provide certain coverage options, such as accelerated death benefits or long-term care. In addition, the amount of coverage you receive may not provide enough for your expenses.

If you need any of these supplemental services, have dependents, or have additional medical conditions, you may want to look into purchasing supplemental insurance. In the event of your untimely death, you may need additional coverage to help support your children and spouse, especially if you are a single parent or the sole income provider.

Private supplemental insurance provides greater benefits and protection to you than employer supplemental insurance can. Usually, the terms of this coverage are slim and you can’t move your employer-provided insurance from one company to another. You can determine for yourself the coverage you need and help bridge gaps in your coverage that you will appreciate later.

However, supplemental life insurance from a private source comes with a number of requirements. You will need to undergo a medical exam and have your expenses evaluated. Purchasing supplemental insurance when you’re young and healthy, as opposed to older, can help lower your premiums.

What Is Portability?

If you receive life insurance benefits from your employer, it may be non-portable. Portability refers to the ability to take your insurance with you when you move to another job or retire. You should not depend on employer life insurance coverage alone to cover your costs. Opting for company-sponsored supplemental insurance would not help you in this situation.

Private supplemental life insurance policies can help provide a safety net in the event of a policy change, but you should also look for your own policy. As you progress in your career and in life, opt for purchasing your own insurance in the event of any lifestyle changes.

Life insurance is vital to protect your family’s financial future in the event of your death. You should take advantage of your free plan yourself, and purchase your own private insurance to help bridge any gaps.