Picture this: You land an exciting new job with great benefits: vacation time, health insurance, 401(k)… even free lunch once a week!

They offer group life insurance, too – two times your annual salary. That sounds like a lot, right? In many cases, it might not stretch as far as you think.

Let’s say you make $50,000 per year. A benefit of $100,000 can make a big difference to your family – for a while. But through the years, could it really go the distance to pay for expenses and reflect the legacy you want to leave for your family? Think about how far $100,000 could go to pay for these common needs over time:

  • Private student loan debt
  • Mortgage or rent payments
  • Utilities, groceries and other costs of living
  • Healthcare
  • Childcare expenses
  • Charitable giving

Life insurance is, by its very nature, a deeply personal financial decision. When you rely exclusively on group coverage through work, you miss the opportunity to personalize your coverage based on your specific needs. Here’s why that matters.



The experts at Life Happens, a nonprofit organization dedicated to educating the public on the importance of life insurance in financial planning, offer these four disadvantages of relying on your group insurance alone:

  1. If your job situation changes, you may not be able to maintain the same coverage.Whether that means being laid off, moving from full-time to part-time or leaving the company… in many cases, an employee can’t retain their policy when circumstances change.


  1. Coverage may end when you retire or reach a specific age.Many people tend to lose their insurance coverage when they continue working past a specified age or when they retire. This could mean losing your insurance when you need it most.


  1. It’s a benefit… not a guarantee.Your employer can change or stop offering life insurance coverage without your consent, since the contract is between your employer and the insurer. With many employers in cost-cutting mode, employee benefits might (unfortunately) be among the first things on the chopping block.


  1. Your options are limited.This type of coverage is not tailored to your specific financial needs. Furthermore, your employer might not offer the option for you to purchase extra coverage as you need, leaving you exposed.


Individual life insurance plans can offer superior benefits, and regardless of your employer or employment status, you can tailor them to meet your individual needs and circumstances.