What is supplemental life insurance?
You may get minimal life insurance as an employed person. In such a case, you opt for supplemental life insurance to ensure better coverage for your family. It saves your family from a crisis in case of any unfortunate event.
Generally, your employer helps you get group term life insurance. But it offers a minimal amount at the time of maturity. The final payout you get equals one or two times your annual salary. If you solely depend on this amount, it will prove a disaster in the future.
Supplemental life insurance provides extra protection. You explore this option for many reasons. One reason could be that you need specific coverage not incorporated in the existing plan. Examples of this kind of life insurance are:
- Life insurance for your family members
- A policy that ensures the financial safety of your family if something happens to you
Supplemental Life Insurance Might Offer Add-Ons
The payout you’re eligible to receive is usually a percentage of the death benefit amount. This limit will depend on the insurer, but typically ranges between 50% and 90% of the full death benefit.
How much supplemental life insurance do you need?
Mostly, it depends on your plans. You can decide this amount by ascertaining the goals you want to achieve at the time of maturity of the policy. Your current insurance policy also plays an instrumental role in deciding the right amount for this purpose.
Generally, your life insurance plan should be 5 to 20 times your annual salary. But it is no hard and fast rule.
The costs that you aim to meet through the insurance policy are the main driving factors. You can pay for this policy yourself, or your employer can make the payment. Following are the supplemental life insurance policies that you can get through an employer:
Child life insurance: This insurance can prove sufficient for the coverage of eligible dependents.
Spouse life insurance: It will help you get life insurance for your spouse.
Employee life insurance: It will help you get coverage in addition to an existing policy.
AD&D insurance: Accidental death and dismemberment insurance is a valuable addition to your existing policy. It can help you meet emergency needs. If you have a severe accident, this insurance policy can help you pay for the treatment expenses.
Life Insurance Estimator
Is supplemental life insurance job dependent?
Yes, it is job-dependent. If you get it through the employer, you may lose it by quitting the job. But some companies offer the option of portability. In such a case, you can continue with your policy despite giving up your job.
Is this insurance policy convertible?
Yes, it gives you an option to convert it into individual life insurance if you got it as a company employee. The additional benefit you get through this conversion is that it helps you evade a medical exam. However, there is no restriction on converting a part or whole of this policy into traditional life insurance.
It is an excellent opportunity for those who cannot qualify for traditional life insurance due to medical conditions.
Best Life insurance strategy
The best way to protect yourself against any mishap in the future is to adopt the right insurance strategy. As well as, you can get solid life insurance protection by signing up for individual and supplemental life insurance policies.