It’s open enrollment season, and I need to review my group benefits through work. Is group life insurance a good idea? If you recently started a new job or if open enrollment season has started at your workplace, you may have a chance to get life insurance through your employer at little or no cost to you or change your insurance death benefit levels. But is group life insurance a good idea? What are some of the advantages and disadvantages of getting coverage through work?
 
Most employers offer some group life insurance as a workplace benefit and may subsidize some or all of the benefits. These employer-provided subsidized life insurance policies are sometimes referred to as basic group life coverage and typically require little to zero premiums for the employee. Federal and large company employees most often have fully subsidized basic group life coverage. This needs to be confirmed through your HR or benefits representative, or you can often confirm by reviewing your pay stubs. You may be able to purchase additional or increased voluntary coverage during this open-season period. Still, there are some important considerations, including what the new premium is and whether there is any risk assessment.

Typically, these supplemental or voluntary coverages have some risk assessments for eligibility, are age-banded, and increase every five years. If you have health issues, this can affect your approval. These policies are usually NOT portable, so if you leave your current employer for any reason, you will likely lose that coverage. Finally, group coverage often comes with little to no risk assessment, so policyholders in these groups usually pay higher premiums than if they purchased life insurance on the open market.

For these reasons, a private life insurance policy may be worth exploring.
This may also be the case with Group Disability Benefits, so a review of disability coverage is also a good idea at this time. For a detailed review of your current life insurance and your best options, please contact your XML Financial Advisor or Kevin Peters of XML Financial Group directly.

This communication is for informational purposes only. No content or reference to a third-party article is intended to be a recommendation for the sale or investment in any product, strategy or service nor should it be perceived as individual advice. This commentary does not necessarily reflect the opinions of all employees or XML Financial Group and its affiliates (“XML”).  XML is not responsible for any actions taken related to this information.

XML Financial Group and its Wealth Advisors are not licensed tax or legal professionals and do not offer tax or legal advice. These materials are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer under U.S. federal tax laws. Individuals should consult their personal tax or legal professional regarding tax filings, such that may be required for certain trusts, retirement and ERISA plans, and any tax- or legal-related investment decisions.