Life insurance provides a death benefit to an insured’s family at the time that individual passes away.
This can be used to pay final expenses, mortgages, tuition, and maintain a way of life for those we leave behind. That is why it becomes crucial to plan for the unexpected in advance.
Many employers provide a base level of life insurance for employees. This is typically provided in the form of group term life insurance. The benefit amounts can vary, however they are often a flat amount such as $20,000 or $50,000 or more specifically based on an employees’ salary. This is an excellent benefit to provide employees, however frequently these plans cease to exist at the time an employee leaves the company, whether through lay-offs or other forms of termination that can include retirement. Sadly, this is the time many people most need life insurance and it can be rather difficult to obtain. Life insurance premiums are bases on several factors including current age, smoker/non-smoker status and the amount of coverage applied for. When someone retires and applies for life insurance the cost can be very high because of their age at that time. In addition, when applying on an individual basis, you are medically underwritten and may be declined based on certain health conditions.
The best opportunity for individuals to acquire permanent life insurance is through voluntary, employer sponsored programs. This allows employees to elect coverage at no cost to the employer. Often times this coverage can be obtained on a guaranteed issue basis meaning that employees who on their own would be declined will be approved.
Voluntary life insurance is fully portable as well, meaning that when you leave the job the coverage stays with you at the same cost. There are several different kinds of voluntary life insurance available such as universal life, whole life and term life. In addition various policy riders that can be added to the plans such as Accidental Death & Dismemberment, Long Term Care, Critical Illness, Waiver of Premium and more.