Do You Need Supplemental Life Insurance? 

Have you ever heard of supplemental life insurance?

When it comes to life insurance, most people opt for either term life insurance or whole life insurance.

Both types are available through employers and private companies.

Term life insurance provides coverage for a specific period, known as the policy term.

Because it only covers a set period, term life insurance is generally more affordable than whole life insurance, which is designed to provide lifetime coverage.

Many policyholders depend on their employer for term life insurance coverage, which might not be sufficient. Employer plans typically offer coverage equal to one or two times the employee’s annual salary. Supplemental insurance can help bridge the gap left by employer-sponsored plans.

Whole life insurance policies also face coverage shortfalls. These policies cover individuals for their entire lives and accumulate a cash value, allowing the policyholder to cash out if needed. However, it is significantly more expensive than term life insurance.

Purchasing supplemental term insurance can be a more budget-friendly option.

Employer Supplemental Life Insurance

Many consumers buy supplemental insurance through their employers. One benefit is that employees can often skip the medical exam required by private insurers. However, employer-sponsored supplemental insurance may have limitations, so it’s crucial to research the coverage thoroughly.

Additionally, employer-sponsored life insurance is not portable. If an employee leaves their job or is terminated, the coverage ends, and they would need to seek new coverage either through a new employer or a private insurer.

Private Supplemental Life Insurance

Some employers offer supplemental life insurance options that enhance coverage without additional stipulations, such as accidental death and dismemberment (AD&D) or burial insurance.

This can be ideal for employees with larger families, although these plans often lack the portability of private insurance.

The average employee stays with an employer for less than five years, so purchasing supplemental insurance through a private carrier is typically a better long-term solution.

Contact Us

Contact Dunton Insurance Agency in Cranberry Township, Pennsylvania, to explore your life insurance options and get a quote.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.