So you’ve just started a new job, congratulations! As you’re filling out the paperwork you get the option to add supplemental life insurance. Hold on, what is supplemental life insurance? Do you even need it?
What Is Supplemental Life Insurance?
Supplemental life insurance is just that: life insurance that supplements your existing life insurance policy through additional coverage. Note how we said existing life insurance policy. In order to actually get supplemental life insurance, you actually need to have a policy already.
Supplementary life insurance can be supplementary to both whole life or term policies. There’s often confusion around the term itself since it frequently gets compared to term life insurance. The difference is that you already need to have term life insurance in order to get supplemental life insurance. Supplemental life insurance is typically purchased to add onto an existing term life insurance policy to provide broader coverage.
Overall, supplemental life insurance’s purpose is to give your beneficiaries a larger payout or cover costs like funeral expenses to make your loved one’s lives easier.
Do I Need Supplemental Life Insurance?
Whether or not you need supplemental life insurance will depend the most on your circumstances and preferences.
If you already have a good life insurance plan at your workplace, and you’re young, single, healthy, and have no dependents, then supplemental life insurance is probably not overly worth it.
Conversely, if you’re married, have a family, or both and are worried about your health, additional coverage may greatly benefit you to bring you more peace of mind.
Supplemental life insurance can also be considered a kind of guaranteed life insurance since it doesn’t require a medical exam which is great if you’re worried about your ability to be insured.
However, before you decide that you need extra life insurance, make sure to go through your policy and investigate all that it offers. Depending on your circumstances it may be enough for your needs.
Can You Take Supplemental Life Insurance to a New Job?
One aspect of supplemental life insurance that is important to consider is its portability. In other words, how easily can it be transferred to a new job.
In most cases, your current life insurance policy with your employer isn’t portable because it’s often a part of a group plan and therefore cannot be transferred.
To stay constant with your coverage if you anticipate that you’ll be moving between jobs somewhat often it’s best to purchase life insurance privately. That way you’ll always be protected and not lose out on any benefits as you move to new positions. Plus, you’ll easily be able to purchase supplemental life insurance this way if you need more coverage.
What Does Supplemental Life Insurance Cost?
Supplemental life insurance costs are dependent on aspects like your health and age—the same as other life insurance policies. The younger and healthier you are, generally the more affordable it will be.
However, because group life insurance plans for employees are relatively inexpensive, purchasing supplemental life insurance that’s covered within that plan could be highly affordable.
In general, choosing to get supplemental life insurance will come down to your needs. It can provide additional peace of mind knowing you have the maximum coverage possible, or you could simply be satisfied with the life insurance you currently have. Look into your current life insurance policy and plan accordingly if you’ll need the extra coverage or you can live happily without it.