Many companies offer employees the option of signing up for group life insurance, but is it the best choice? The answer depends on a number of factors. To help the curious make an informed decision, Steven Hall - Farmers Insurance in Mountain Grove, MO, provides expert guidance on whether partnering with an employer for optimum coverage makes financial sense.

The local agency takes a comprehensive view of the overall policy, benefits, and costs to maintain a group life insurance plan offered at work. Some key features may help reach the best conclusion.

Group Life Insurance Features to Consider

Portability

Unfortunately, when an employee leaves a company, they can’t take their policy with them. Whether it's a layoff, voluntary resignation, or firing, the former staff must now find another plan to fill in the gap. They also run the risk of their next employer not providing group life insurance to their employers.

Coverage

To keep the costs down, some companies will only offer the bare minimum. This means features and coverage amounts may not be adequate enough to meet the employee's needs. As a general rule, an employer will take a staffer's annual salary, multiply it by two, and the figure will be the maximum amount of life insurance offered. However, many professional insurance agents recommend at least five to 10 times a person's annual salary to ensure adequate coverage.

Policy Uncertainties

A group life insurance policy is also at the mercy of unexpected price hikes. Employees may end up paying higher premiums at the time of renewal. Some employers only offer one or a handful of carrier options, which can also come with uncertainty regarding policy changes. An even dire scenario is when a company decides to stop offering coverage for whatever reason. Employees are left scrambling to find a new policy.

Group Rates

Depending on the type of coverage, younger or healthier employees may end up paying more to make up for those who aren’t as healthy or nearing retirement. Essentially, the group rate can be a misnomer. Employers often continue to rely on a blanket rate because it keeps insurance costs and claims low.

Steven Hall - Farmers Insurance has the extensive experience to help you make the appropriate group life insurance choice. Make an informed decision by calling (417) 926-7900 for a friendly consultation. Visit the website for additional information on other life insurance options and to request a quote.