Group life insurance is a common benefit of working for a company. Why not take it if it's cheap? But you should think about what you are getting.
What do you get with group life insurance?
Many times, the amount of group life insurance you get is the same as your salary. Most of the time, it's between one and two times your salary. This amount of coverage isn't enough to take care of a family if the main breadwinner dies. In the life insurance business, the rule of thumb is that you need 70% of your net income after taxes to make up for the loss of income. The family may need even more if they still have debt or if someone in the family has health problems.
If you change jobs, what happens to your group life insurance?
If you leave your job or change jobs, you will no longer have group life insurance. If you have a health problem between jobs, it might be hard to get a new policy with your new employer.
Is it best to get group life insurance for the long run?
No. Having your own life insurance policy is a good way to prepare for your financial future. Then, the coverage from your employer and the life insurance policy can be combined to give you a good amount of coverage.
When is the best time to get life insurance?
If you've been putting off buying life insurance, talk to an independent life insurance broker who can get information from many different companies. He will gather basic information from you in terms of your age, sex, health and recommend a medical so you can get a cheaper premium from a carrier. The sooner you do this the cheaper the premiums will be, for your life insurance. Overall, you have more control over your policy than you do with group life insurance.
