As you start your new job, you find yourself pre-occupied with getting to know the workplace as well as different exciting opportunities that unfurl before you. The first few weeks are spent in adapting to new bosses, new co-workers and new challenges. Life insurance is the last thing that comes to your mind. However, you need to consider certain issues before you go for the insurance of the employer.
The changing trend in Life Insurance system
Nowadays, there is less number of American employers who provide benefits that they pay completely. Instead, it is the employees who pay for them (also called voluntary benefits) that supplement traditional “paid” benefits. Life insurance is one of the voluntary benefits. In the last few years, the sales of voluntary benefits have increased by 25% annually and presently, it stands at 50% of all benefit sales. However, it is the workers who have to decide whether to buy the voluntary benefits that are offered by the company or look for life insurance at some other place or else select to integrate both of these.
Company's benefit plan Vs voluntary benefit plan
Employees of large employers are able to buy at reduced prices voluntary life insurance benefits at special group rates. Also, there are no requirements of medical exams for voluntary benefit plans and employees are not excluded after their medical history or current health status is taken into account. This results in cheaper voluntary benefit plans. However, the point to note is that the availability of these plans to all workers does not necessarily mean that the plans are appropriate for you.
Points to consider before selecting your plan
The following are some important issues that must be considered before selecting between benefit package of an employer and an outside insurance carrier:
- The coverage that is available through employer will lapse once you change your job along with the money that is put into it.
- Although the wholesale plan bought seems to be inexpensive, but the premium that one pays keep on rising every year.
- The plan that is offered by your job was meant for as many workers as possible. Hence, the plan is same for every worker, though there may be young or old worker than you and their coverage needs may not be the same as yours. According to a study by the Life Foundation, life insurance of most of the Americans do not have coverage, considering their age, health and the status of their health. Every worker does not have to go by these generic policies and there may be the need to look elsewhere to get full coverage that they require.
- A buyer of own plan would get certain tax breaks that one would otherwise have to forgo.
- Young and healthy worker would do well to research their own plan as denial of coverage from outside carrier is not there. Also, the options that are provided by an employer's plan need not be to your requirement.
- Mature employees would benefit from the additional options as well as flexibility that are available from buying their life insurance through a broker. This is because you pay what you are looking for and nothing more.
- The coming of online life insurance has made comparison of life insurance plans much easier as one can find plans that fit their need and budget.
Finally, it needs to be highlighted that as you change your job, you purchase your life insurance plan after making a thorough research of all your options. You can look for an outside customized plan for your available needs as your company does not know what your right life insurance policy is.