Retirement. A time that many look forward to and often seems entirely too far away. We spend a lot of time thinking about and saving for the time in our lives when we finally get to retire but have you ever considered what will happen in terms of your life insurance?
The answer to that depends on your life insurance policy.
If you have employer-provided life insurance, you have some decisions to make. When you retire and leave your company, that policy ends and so does its coverage. The good news is you have some options:
Option 1 – Convert the Policy. You may be able to convert the employer-provided group policy into an individual one. This means that the policy would become yours and no longer be associated with your employer. It is important to note that this option often comes with higher rates because conversion premiums tend to be high than premiums for the group policy.
Option 2 – Let the policy lapse. You don’t have to do anything, and the policy will simply cease to cover you. Group life insurance usually terminates within a month of you leaving your job.
Option 3. Purchase your own life insurance, separate from your employer. This option provides you with coverage and is often the cheaper option, let’s explore it more…
Individual life insurance is an insurance policy that you purchase separately and unrelated to your employer. It can be customized to your unique needs and because it’s not through your employer, you never have to worry about losing it when you retire.
There are several types of individual life insurance available:
- Term Life Insurance. This type of coverage is typically sold in lengths up to 30 years and coverage amounts vary but can go into the millions. Term life is considered one of the most affordable and accessible life insurance options.
- Term Life Insurance: Return of Premium. This type of coverage is very similar to term life with one big exception… You get the money you pay back at the end of the term if you have not passed away. This sort of guarantee is nice as it gives you financial flexibility, later on, to transition into a permanent life insurance solution.
- Universal Life Insurance. This type of coverage offers guaranteed death benefits and premiums that will not change as long as you pay your premiums on time. Typically, you can choose at which age you want your death benefit guaranteed, for example, 95 or 100. Universal life usually does not hold a cash value and therefore is less expensive than other permanent life insurance solutions.
- Whole Life Insurance. This type of coverage will last until your passing as long as you pay the premiums. Typically, your premiums will stay the same, you get a guaranteed rate of return on the policy’s cash value, and the death benefit does not change. This policy is often more expensive than other policies.
So, which should you choose?
When it comes to individual life insurance vs employer-provided life insurance, it’s not really an either/or situation. Individual life insurance can be the most secure and help ensure that your loved ones are covered. For the best advice for your individual needs and to explore your individual life insurance options, give us a call at 844-GANNONS to speak with one of our licensed agents today.