Work: Benefits Offered By Employers

Many employers offer life insurance to employees.

• Usually the employer will pay for a base amount of coverage, such as $10,000, $25,000, or, often, "One times your annual earning rounded to the next higher thousand."
• This coverage usually comes with a rider called Accidental Death and Dismemberment which doubles the death benefit in the event of accidental death.

Some employers offer supplemental life insurance which is an amount of life insurance above the base amount of coverage.

• The employee is generally required to pay the entire premium for supplemental life insurance. If you have a serious health condition and heirs you care about, it's worth considering.
• If offered, supplemental life insurance is usually a range of amounts, such as "$10,000 increments to a maximum of $50,000" or "an additional one, two, or three times your annual salary."
• Supplemental life insurance coverage is frequently offered without any questions about your health. There may be a maximum above which health questions and possibly even a physical exam will be required.

If you sign up for life insurance when you are first eligible, there will probably not be any health questions asked. However, if you wait to sign up later, or even try to increase the amount of the benefit, there will likely be health questions that could keep you from getting the coverage.

Life insurance for your dependents is occasionally available on an optional basis.

• The amount is usually low, rarely more than $5,000 or $10,000 on a spouse and less than $5,000 on each child.
• There are no medical questions about you or the dependent who is being covered.
• The beneficiary is always the employee.

NOTE: Keep in mind that life insurance now can provide a living benefit or cash from a loan or sale while you are alive. These reasons add to the traditional reasons to have life insurance to suggest that you maximize the amount of life insurance - and take it with you when you leave a job. To learn more, click here.

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