Are You Dependent on your Employer-Provided Life Insurance Coverage?

Many of those whom I have approached, particularly those who are currently employed, have this common excuse for not buying a life insurance plan:

“But I’m already insured under our Group Life Insurance Plan. I don’t need additional coverage.”

I used to work in a food manufacturing company as an HR Practitioner. My employer was responsible enough to provide life insurance coverage for all of its regular employees.

But having it as part of my employee benefits did not stop me from getting my own life insurance policy.

(Check this out: My First Life Insurance Policy)

I encourage every working individual to purchase his own life insurance plan, on top of his company-sponsored group life insurance plan.

Why? Here are my Top 5 Reasons:

  1. Not all companies provide life insurance coverage to their employees. This is a fact. There is no government mandate yet that requires private companies to enroll all their employees in a Group Life Insurance plan. Employers shoulder the cost of the insurance premiums. There are companies who cannot afford getting a group plan, and there are those who just refuse to allocate a budget for it, even if they can afford it.
  2. There is no guarantee that you will work for the same employer all your life. There is always the possibility of transferring to another company without the same set of benefits (again, read #1). Once we leave a company, we leave along all employee benefits that we’ve been enjoying with them. I’ll expound on this later.
  3. Life insurance coverage is a privilege given to Regular Employees only. Sad, but true. But contractual workers are exposed to the same risks as regular employees.
  4. Even if your Employer has a Group Life Insurance plan, there are times when the company fails to submit a complete list of their employees. Whether due to human error or system error, it is possible to accidentally delete an employee from the list during enrollment. Oftentimes, this omission is discovered only after the employer files for an insurance claim and the affected employee cannot be found on the list. I’ve worked in the corporate setting long enough to witness such glitch, so trust me when I say: IT CAN HAPPEN.
  5. You cannot choose your insurance coverage and insurance provider under a Group plan. Your insurance benefits will solely depend on what the insurance company will offer and which plan your Employer can afford to give to its employees. If they can afford basic coverage only and none for accidental death, disablement, or critical illness, then your benefits are limited to that; you can’t make any special requests. If your employer chose an insurance provider that has a questionable track record, then your life insurance benefits could be in serious trouble.

No More Security Blanket

Let me go back to reason number 2. Allow me to share with you my story.

My husband and I used to work in the same company, so we enjoyed the same set of employee benefits.

After 6 years, I left my office job to become a full-time mom. When I resigned from my work, I also lost some of my security blanket, like my health and life insurance coverage.

Good thing I was still covered under my husband’s HMO coverage as one of his dependents. But my coverage was significantly lower than my old one.

As for the life insurance coverage, it’s totally gone.

I can thank my younger self for purchasing my own life insurance plan earlier. I really made sure to pay my premium balance in full because I didn’t want it to have it cancelled by default. It’s my only life insurance coverage left!

Luckily, I spent most of my days at home, away from the physical dangers of the outside world. I just tried to convince myself that my life insurance coverage was enough for the time being.

Hubby’s Turn

A few years after, my husband decided to resign from his work and joined another company. Unfortunately, his new employer didn’t have a Group Life Insurance plan for their employees.

I thought I would be okay with the idea of him not having been insured by his employer. He’ll be fine, I reassured to myself. I’ll just pray for his safety every day he goes out on field.

But when I realized that he went out on field more often and longer than I had imagined, I started to feel extremely anxious whenever he’s out working.

Like me, he also bought his life insurance policy before we got married. But his coverage was even lower than mine.

However, the risks that he’s exposed to have doubled because of the wider scope of his work assignment.

Can you imagine the daily mental torture on my part every time my husband steps out of the house?

After more than a year, my husband was re-assigned to another company with better set of employee benefits. He finally got his life insurance coverage back. Thank you Lord!

We agreed that the next time he decides to transfer to another company, employee benefits will be a major consideration.

Take Charge

Having witnessed employees come and go while I was still in HR, it dawned on me that everyone can be replaced. Once a position is vacated, there’s a big pool of applicants waiting to take over the job. It’s like no one left. It’s business as usual.

But once a family member is taken out of the picture, the void will forever be felt. No one can ever take his or her place.

family

Where our family’s welfare is at stake, we should never let a third party dictate the way we should protect them. We need to take charge!

And that is why, for our health and life insurance needs, we should never rely solely on  employer-provided benefits.

If currently there is no budget to get protection on our own, then there’s no choice but to hang on to whatever outside help available and pray that we won’t need more.

But if we can afford to get more, we must invest in as many insurance products as possible.

Securing the welfare of our family is not our employer’s responsibility; it is ours.

Employee benefits are there to supplement whatever safety blanket we may have prepared for our family. If these are not enough to cover our needs and we did not make an effort to fill in the gap, then we only have ourselves to blame should the need arises later on.

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