We would like to shed some light on the difference between Supplemental/Group/Voluntary Life Insurance you get from your employer and Real Life Insurance you personally own.
Solely relying on supplemental/voluntary/group life insurance is the most common mistake we see our customers make, and the most important thing we want you to understand.
Working with many families over the years has certainly taught us one thing. We don’t have a crystal ball, and we cannot predict the future. We don’t know which customers are going to start their own businesses, need individually owned life insurance to guarantee a loan, or who is going to have a health disqualifying event excluding them from their window of affordable coverage.
We can only do our best to share what we have learned and to help you ask the right questions so you have the tools to make the best decision for your personal situation so you can protect your family and your financial future. Here are some important points you should understand:
- REAL Life Insurance requires an application process. WHY? Because this coverage is the one thing that we cannot buy when we want and need it the most.
- REAL Life Insurance is based on your age, your health and your ability to qualify. The younger you are when you apply for coverage, the better chance you’ll qualify for a good health discount.
- REAL Life Insurance is an asset because you have guaranteed your insurability!
- REAL Life Insurance puts you in control. Group life insurance can be canceled, or the benefits may be changed by your employer at any time. In fact, we are increasingly seeing employers cut back on supplemental benefits to maintain level health benefits as these costs continue to spiral.
- REAL Life Insurance is portable. Most of the time you can’t take your work benefits (except COBRA) with you when you switch jobs, go part-time, or are forced to leave due to an illness. If you can take your life insurance coverage with you, our customers quickly learn they often cannot afford to continue their coverage. The younger you are, the lower your premium will be. This is often the point our customers learn the hard way what it means to guarantee one’s insurability!
- REAL Life Insurance provides peace of mind. Group life gives a false sense of security. When we are young and healthy, our insurability is at its peak, and we are rewarded with preferred rates. If we wait too long, there is a chance health problems could compromise our ability to afford or to even qualify for coverage at all.
- REAL Life Insurance provides a policy contract to the owner. Group life insurance provides a “Certificate” because the employer is the contract owner and holds the master plan with all associated rights.
- REAL Life Insurance allows you to lock in your rates and protect your net cost of coverage over your lifetime. All forms of life insurance get more expensive as we get older. Below is a chart that shows how life insurance premiums increase as we age. There is relatively little price difference between ages 25 and 35 but after 35 the price starts to increase, and after age 45 prices begin to increase steeply and not in a linear manner much like a Double Black Diamond Ski Slope.
How does YOUR Group Voluntary Life Insurance really work? It’s important to know. Is your insurability locked in or will you have to actually apply with the carrier when you leave your company? Does your coverage amount decrease with age?
For all of these reasons, we highly recommend allowing us to help you complete a cost analysis of your group coverage to compare the net cost of coverage over your lifetime. Call us or reply to this email to get started.