when to get supplemental life insurance
Most consumers purchase one of two types of coverage options — term life insurance or whole-life insurance. With term life insurance, the insured receives coverage for a set period, which is known as the term of the insurance. Both employers and private companies offer term insurance. Since the coverage only applies during a set period, term life insurance generally costs less than whole-life insurance, which covers an individual for his or her entire life.
One major problem with term life insurance is that most policyholders rely on their employer for this insurance, and as a result, they don't have enough coverage. A 2015 study by the Life Insurance and Market Research Association (LIMRA) found that 65% of employees with employer-sponsored group life insurance believe that they need more insurance than the employer provides. A typical employer plan provides coverage equal to one to two times the employee's annual salary. For example, an employee making $60,000 annually may receive a $120,000 policy at no cost. For a single employee or an employee with one dependent, this may be adequate. However, an employee with a bigger family may require several times that amount of coverage to take care of a spouse or children if he or she unexpectedly dies. Supplemental insurance can fill in the gaps of an employer-sponsored plan.