When it comes time to enroll in your company’s benefits package, you may see an option to buy a supplemental group life insurance policy. It might seem like a tempting policy to buy if you are looking for a solution to your life insurance needs. However, be forewarned—these policies often don’t provide the most indispensable benefits that life insurance buyers expect. Should you take this coverage, or go a different way when looking for coverage?

Understanding Supplemental Group Life Insurance Policies

A supplemental group life insurance policy acts much like any other life insurance policy. If you enroll in coverage, and pass away sometime afterwards, the policy will pay your beneficiaries an amount of money, so long as it was active at the time of your death. However, many of the similarities stop there.

However, supplemental life policies are usually much more limited in how they will cover enrollees, compared to a traditional term-life or whole-life insurance policy. Still, on one hand, they are solutions for people who cannot get life insurance otherwise, such as if they have a pre-existing condition. On the other hand, however, a policy you buy separately, rather than through your company, might be a better route if you are otherwise healthy.

Why You Shouldn’t Get Supplemental Group Policies

A supplement is something that enhances something else. Usually, it cannot stand alone. You have to think of supplementary group life insurance policies this way. Though it can enhance existing coverage if you have it, it’s usually not enough to work on its own.

• There are Fewer Available Benefits: Death benefits are often small compared to other policies. Policies might only pay in certain cases of death as well. Accidental death and dismemberment might result in a payout, while death from a chronic illness might not be covered.
• Costs are Higher: When you compare supplemental group life premiums to other life insurance premiums, they are often higher relative to the provided benefits. Some policies are priced up to 200% higher compared to what they offer. Rates also usually increase (significantly) every five years, whereas other policies might guarantee level for at least ten years or more.
• Coverage Might Not Last: To make things even more confusing, many policies contain disappearing coverage. The amount of the maximum benefit might decrease over the years, until terminating once you turn 70. Additionally, because this is an employment benefit, your employer can decide to terminate or change the policy at almost any time.
• Policies aren’t Portable: Like you might have to surrender your health insurance when you leave a job, you probably will have to surrender the supplemental group life policy.

All in all, while a supplemental group life policy might help you in some ways, you can usually get flexible and affordable benefits from buying your own private life insurance policy. RWM Insurance can help you save money while still getting you the best benefits for you and your family.

RWM Insurance can save you thousands of dollars by independently finding the absolute best policy at the lowest possible cost that will never change from a highly-rated company. Contact us today for a quote! We work independently with every carrier in the country and can help you find the absolute lowest rate from a top rated company.