My Company Bought Insurance for
Me. Is It Enough Protection?
Employer-sponsored
life insurance, health insurance and other benefits are nice perks. Group
insurance can mean low group rates, liberal group underwriting standards,
protection against policy termination and individual rate increases.
However, if
you rely too heavily on employer-provided coverage or assume your benefits
automatically meet all your needs,  you
may be making a huge financial mistake. Even a quality benefit package
may contain gaps that could leave you and your family exposed to serious
financial risk:
Coverage
may not meet your individual needs.
Employer-sponsored
insurance tends to be "off-the-rack" in design. The benefits you receive
may have little in common with your actual needs and situation.
Limited
protection amounts.
Policies are
often designed to provide basic protection or benefits. Amounts may be
limited by uniform standards. Such policies, unless supplemented, could
leave your insurance package woefully inadequate. Costs generally increase
on an age-based schedule. Especially at older ages, rates on many types
of coverage can increase dramatically.
Your coverage
may terminate if you leave your job.
Under some
policies, coverage is portable (you can take it with you when you leave),
or you have the right to convert your insurance to an individual policy
upon termination. But this is not universally the case. If you quit or
are let go, you may find yourself out of work and without benefits.
Coverage
often terminates without benefit at retirement age.
This is the
very time when life insurance and health insurance can be needed most.
Your employer has the right to terminate the coverage age any time. This
can be a serious potential problem these days, with companies failing to
pay premiums, closing their doors or exploring other cost-cutting options.
False Sense
of Security
Perhaps the
biggest risk to employees is that employer-sponsored benefits can create
a false sense of security. Minimum benefits, based on employment, provide
a valuable safety net for millions of workers in this country. But they
are a starting point — usually not the final word — when it comes to protecting
yourself and your family. |
