Is life insurance through work enough?

Many employers offer life insurance as a benefit – and there’s usually no reason not to take advantage of this perk. However, relying solely on employer-provided life insurance policies to safeguard your family’s financial future can be a big no-no. Here, the Expat Insurance team fills us in on some of the most important things to consider when it comes to group life insurance. Plus, how buying personal life insurance can help you save on life insurance premium rates later.

#1 Group life insurance policies offer lower coverage amounts

Basic group life insurance through work is usually free and easy to sign up for. So, it’s really a no-brainer to agree to some coverage at no extra cost. However, the coverage amounts for group life insurance are typically low. In fact, there’s a good chance your life insurance through work isn’t enough to cover years of expenses, particularly in Singapore, if the breadwinner is not around. By purchasing a personal life insurance policy, however, you’ll get to decide the amount of coverage that’s right for your family if tragedy should strike.

Buying a personal life insurance policy also puts you in the driver’s seat when deciding which type of life insurance policy you want. There are two kinds of life insurance policies: permanent life insurance and term life insurance. Both provide protection against financial loss in the event of death or permanent disability. Yet they differ in terms of coverage duration and how much money you’ll get back if nothing happens to you.

#2 Group life insurance policies offer less flexibility

You may be single or kid-free now, but that doesn’t mean you won’t have dependents one day. And these dependents will need to be financially protected should something happen to you. So, although your group life insurance plan may offer enough coverage now, it may not suffice when your family grows. That said, it’s worth planning ahead and securing lower life insurance premium rates while you’re young. After all, the younger you are when you buy life insurance, the lower the premiums tend to be. If you find that you do not need the same amount of cover later on, you can decrease the sum insured and prorate the premiums accordingly.

What’s more, buying term life insurance also gives you flexibility, as you can add additional levels of coverage – critical illness cover, for example – later if you need to.

#3 Group life insurance policies are not portable

A life insurance policy through your employer is not transferable if you lose your job or move away. And even if your new employer offers life insurance, there may be a gap in cover while you’re in between jobs. This, of course, leaves your family’s financial future vulnerable. So, it’s wise to invest in a personal life insurance policy that can be used anywhere you go.

Additionally, securing a personal life insurance policy now means that if you do lose your job, you won’t have to buy independent cover later on – after you’ve developed a health condition that could seriously increase life insurance premium rates.

Find out more

For more information, get in touch with Expat Insurance. Their brokers are experienced in working with expats to determine the best life insurance policies to suit their needs.

Amy Greenburg

Originally from Los Angeles, Amy is passionate about Netflix, sipping rosé at rooftop bars, travelling, and all things health and wellness-related. She enjoys learning about different health topics through her writing, particularly critical health conditions, food allergies, alternative therapies, and pregnancy and postpartum-related issues