Why You Should Consider a Life Insurance Policy Outside of Your Employer 

When people think of life insurance, the first option that often comes to mind is the policy provided by their employer. While employer-sponsored life insurance can be beneficial, relying on that coverage alone may not offer enough protection for your family or align with your long-term financial goals.

Limited Coverage From Employer Plans

One of the main drawbacks of employer-provided life insurance is the limited coverage amount. Employer policies typically offer coverage between one and two times your annual salary, which may not be sufficient for your family’s needs if you pass away unexpectedly.

Financial experts generally recommend coverage between five and 10 times your annual income to help support dependents with living expenses, debt repayment and educational costs after you are gone. With an individual life insurance policy, you can select the coverage amount that aligns with your unique financial situation and ensures your family is adequately protected.

Portability and Long-term Security

Another critical reason to consider a separate life insurance policy is the issue of portability. Employer-sponsored life insurance policies are tied to your job, meaning if you change employers or lose your job, you might lose your life insurance coverage. Additionally, if you are no longer employed when you retire, you could be left without coverage when you need it the most.

Individual policies, however, stay with you regardless of employment status, giving you peace of mind and long-term security.

Tailored Life Insurance Policy Options

Outside of employer plans, individual life insurance policies can also offer more customization. With an individual policy, you’ll know that your coverage remains intact as long as you pay your premiums. Contact DRD Insurance Agency in La Habra, California, to learn more.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.