Skip to main content Accessibility help
  1. Help center

For financial professionals

  1. For financial professionals
  1. For plan sponsors
Sign in or register

3 myths about employer provided life insurance

Insure
Overhead of a wooden desk with a monitor, keyboard, mouse, papers, coffee, and a pair of glasses on it


Many people receive life insurance through their employer. This coverage often offers low rates and a brief application process. The intended result? A one-size-fits-all insurance policy. But is this benefit providing the coverage you truly need?

 

Here are three common myths about employer-provided life insurance and the reality behind those myths.

 

Myth #1: “My employer-provided life insurance is all I need.”

Reality: Often, life insurance coverage through your employer is limited to 1-2 times your annual salary. The problem with that is your “salary” doesn’t include commissions, bonuses, or second incomes. It doesn’t paint your whole financial picture. If you have dependents, you generally need at least 10x your income.

 

Also, buying life insurance is planning for your future, so you’ll want to be mindful of your family’s needs, which may be more than what your employer-provided insurance offers. Would that amount be enough to support them long-term if something happened to you?

Myth #2: “It’s my life insurance policy. I have complete control over it.”

Reality: When you opt for employer-provided coverage, your employer owns and controls the policy, not you.

If your employer decides to cancel or reduce the benefit, you could be left without coverage or with not enough coverage to last. And those seemingly low rates that your employer initially charges can increase each year, unlike rates for an individual Term policy, which typically do not increase as you get older.

Myth #3: “My life insurance goes with me, job to job.”

Reality: In most instances, your policy ends when you leave your old job. Life insurance obtained through your employer stops when you stop.

When you change jobs, you will need to replace any employer provided life insurance that you relied upon. With your own (individual) life insurance, you’re in control.

Take a moment to examine your family’s total financial situation. If something happened to the main earner, what would be needed to pay off the mortgage, support the family day-to-day and put the kids through college?

Ready to take control of your financial future?

To better understand how life insurance can work for you, talk with an insurance professional. Our experienced insurance professionals will discuss your individual situation and put together a no-obligation assessment of your family’s needs. 

 

 

 



This article is intended to promote awareness and is for educational purposes only.
 

Insurance products are issued by: John Hancock Life Insurance Company (U.S.A.), Boston, MA 02116 (not licensed in New York) and John Hancock Life Insurance Company of New York, Valhalla, NY 10595.

 

MLINY121721567-10