What is Supplemental Life Insurance – Overview
Life insurance protects your family once you are gone! It provides financial freedom and helps you live worry-free. If we talk about today’s scenario, employer protects their employees’ families by offering them life insurance policies.
The premiums are paid from their salaries and employers also give a portion of their premiums. When it comes to buying life insurance, there is an optional life insurance you can get named supplemental life insurance. Everything you need to know about supplemental life insurance is given in this article.
What is Supplemental Life Insurance?
Supplemental life insurance is nothing but additional life coverage along with your basic life insurance. Supplemental life insurance is an optional coverage that you can add to get more life coverage benefits once you pass away.
Mostly, employers offer supplemental life insurance to their employees as a token of appreciation for working in their company. You must choose the right supplemental life insurance even if your employer offers it.
It is crucial as it can cover the funeral and other expenses after your death. Your family members don’t need to pay for such expenses as you already planned for them and have reliable supplemental life insurance coverage.
Depending on your annual income and requirements, you can get supplemental life insurance starting from $5,000 to $25,000 or even more.
If you work in a company where your employer is offering this policy, then you should not hesitate to take it. It will give you maximum benefits in the end.
Is It Worth Buying Supplemental Life Insurance?
As noted above, employers provide supplemental life insurance to their employees as group life insurance. Before you opt for this policy, you must understand the difference between basic and supplemental life insurance.
In a nutshell, basic life insurance is one or two times your salary. Most people have this policy as it covers up almost all the expenses of your family members once you pass away.
However, some people want even more benefits to bear the cost of their funeral and other tasks soon after death. They can get supplemental life insurance for such expenses.
Group life insurance policies offered by employers to their employees have many advantages. Here we have listed some of the advantages of supplemental life insurance.
Advantages of Supplemental Life Insurance
No Qualification Required
Since your employer is offering you the policy, it requires no qualifications or simple qualifications. Since you already are a healthy person, there will be no requirements for body check-ups and other tasks before your policy gets approved.
Unlike basic life insurance policies, the premiums for supplemental life insurance are low. Moreover, group supplemental life insurance policies even lower the total premium costs. Most companies offer additional discounts on group policies which will decrease the number of premiums for the policyholders.
The premiums for the supplemental life insurance are deducted from your salary. You need not pay the premiums or worry about the due dates. The premium amount will be deducted from your bank account automatically.
How Much Supplemental Life Insurance Do I Need?
According to finance experts, the total coverage from basic life insurance should be around ten times your annual income. If your yearly income is $50,000, cover your life with $500,000 of life insurance.
Besides basic life insurance, some people want additional family benefits after passing away. If we talk about supplemental life insurance, your employer gives you up to $50,000 life insurance as supplemental life insurance. The amount of the supplemental life coverage will be given to the family of the deceased i.e. for one-time.
Moreover, if you want to provide more benefits after your death, you can go for an even bigger amount that needs more premiums from your side. You can activate an auto-debit system that deducts the premiums from your bank salary.
You can get even a $200,000 death benefit under supplemental life insurance. If your employer is offering you supplemental life insurance, discuss it with him and ask him to increase the amount you are willing to pay the higher premiums on your own!
It depends on your family’s basic requirements. If the basic life insurance doesn’t provide proper coverage to your family, then go for the higher premium supplemental life insurance that can give your family more benefits after your death.
What Else Can I Get Than the Supplemental Life Insurance?
The employer-offered supplemental life insurance comes with restrictions. However, you can choose the private insurance provider from whom you can get your preferred supplemental life insurance coverage.
You have two options for buying additional life insurance for your family.
Option 1: Go for a Separate Policy
To get maximum benefits from the additional life insurance, you must go with a private company and get a separate life insurance policy. If you change your employer, the policy stays with you in the future, and your family can get the said amount after your death from that policy.
Option 2: Add Riders to Your Policy
It is always recommended to add a rider to your policy. A rider is a beneficiary of your policy and can receive the total death benefit of your policy. Do not forget to add riders to your policy, as they are the real beneficiaries of the policy.
When you add a rider, there’s no need to get supplemental life insurance. You can still choose to get supplemental life insurance when needed.
The Bottom Line:
If you are satisfied with your life insurance policy’s basic life insurance coverage, then there’s no need to take supplemental life insurance. If the employer offers supplemental life insurance as group life insurance, you should go for it as the premiums are lower and the benefits of such policies are higher. Calculate your expenses, premiums, and income before adding supplemental life insurance.
I am a dedicated healthcare researcher and an enthusiast specializing in medical grants, medical education and research. Through my articles, I aim to empower healthcare professionals and researchers with valuable insights and resources to navigate these critical aspects effectively.