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Do You Need Supplemental Life Insurance?

The first question is, what is supplemental life insurance?

Why would I need to consider this type of plan?

seniors considering retirement

Supplemental life insurance is another form of additional life insurance. It’s not meant to take the place of your primary policy or a good term life insurance policy. But it will give your family additional coverage should the worst happen to you.

I know you have always contemplated, whether or not to purchase more because I know I have. If you’re a father, mother, caregiver, etc. it’s always been something you may have thought about at some point. 

You can get supplemental life insurance two ways: through your employer, or privately. Sometimes you can get a supplemental term policy through your employer.

The benefit of getting it through your employer is it may be less expensive because it is usually covered through group coverage which in turn costs you less. However, the negative of buying through your employer is that you may be limited (capped) on your death benefit.

Personally, I am not a fan of this purchase because term insurance is not expensive so why be capped on your coverage? If I’m purchasing additional coverage especially through a term plan, I really want to get the most coverage especially when term policies are not expensive.

The other big pro of purchasing your additional coverage privately through a broker is that you have more choices to choose from.

Supplemental Life Insurance vs AD&D (Accidental Death and Dismemberment)

Some employer additional coverage has other limitations such as accidental death and dismemberment which means the insurance will only pay out only if you expire from an “accident only.”

Something else you need to look out for is if the policy has a term called “Spouse or Domestic Partner Insurance” which could put limits on your death benefit and how much insurance you could purchase.

Buy insurance through BGA Insurance Group and you can purchase what you want without having to worry about terms, verbiage and limitations.

Your biggest advantage of purchasing private supplemental life insurance is that it is mobile. Meaning, you will keep the coverage as long as you are paying the premiums. If you decide to leave your employer you keep your insurance in force, whereas if you leave your employer you will probably lose your coverage.

You can also purchase this insurance for your spouse or domestic partner in his or her own name and have different benefits to fit what your lifestyle affords you.

In a lot of cases, additional supplemental insurance purchased privately can also be less expensive. For example, let’s say you’re young and healthy. In this case, life insurance will be less expensive for you or the policyholder payor.

Bottomline, before you actually sign on the dotted for your employer’s coverage, you might check to see if you can get an individual policy at a much less premium.

On a personal note and the reason I carry additional coverage is affordability, plain and simple. When I was inquiring about life insurance for myself the motivation was to make sure my family was taken care of in case I pass away.

I wanted the largest death benefit as possible for what I could afford. I priced myself a “Guaranteed Universal Life” plan which also gives me a “Tax Free Retirement Benefits” for what I can comfortably pay for each month.

After reviewing everything, I wanted more coverage, so I decided to purchase more insurance through a term policy which is the cheapest insurance you could buy but also give you the death benefit you desire. So now I have main coverage through a UL and my additional coverage through a term plan that I can afford.

Here’s the bottom line – do you need additional coverage, and can you afford it? If you’re exclusively shopping on the private market, consider adding supplemental insurance to your life insurance policy, but sit down with a broker who can offer you many choices, explain your benefits and clarify terminology. Your BGA Insurance agent is here and ready to assist you.