It’s your first day at a new job. You’re brimming with a curious mixture of excitement and anxiety as you make your way to the new hire orientation. During the presentation, human resource reps go over how to sign up for your personal accounts: Flexible Spending Account (FSA), your health insurance, your 401(k) and your employer-provided life insurance.
But there’s one crucial priority that they won’t discuss with you—an independent, individual life insurance policy that you own and control.
In today’s post, we’ll discuss why buying your own life insurance is just as important as your employee benefits.
1) If you don’t use it, you WON’T lose it: FSAs are incredibly valuable if you need to save for health care expenses that aren’t covered by your medical insurance. However, one of the biggest pitfalls of FSAs are their “use it or lose it” policies. If all the funds in your account are not used within a certain amount of time, you forfeit the money.
That means that hundreds or thousands of dollars of your hard-earned money could disappear like yesterday’s memory.
Unlike an FSA, life insurance can allow you to have coverage for your long-term care years in advance, protect your family in the event of your untimely dealth and the best part is that if you don’t use it, the cash build up can be used for other purposes.
2) Post-health coverage: From annual checkups to vaccinations and everything in between, your health insurance helps to keep you and your family healthy. But health insurance won’t protect your family in the event of your passing. If you battle against a lengthy disease before leaving this earth, how will your family shoulder the medical bills?
Term life insurance was designed for scenarios just like this. In the event that you pass away, your family can pay for any outstanding medical costs not covered by your health insurance, as well as covering your final expenses with the benefit from your life insurance policy.
3) No vesting period necessary: Enrolling in a 401(k) account is one of the first accounts that new employees set up. For many, it’s one of the easiest ways to save for retirement because a set (pretax) amount is deducted like clockwork from each check. But unlike your 401(k) account, your life insurance policy will not make you wait three to five years to become fully vested to access your funds because your payout is always available. If your policy is inforce, your family will receive a benefit payout in the event of your passing.
4) Employee life insurance: Most companies offer their employees an employer-provided life insurance policy. So, if your company provides you with life insurance, then you don’t need your own policy, right?
The primary reason for this is if you become unemployed or are fired, you’re leaving the company AND your insurance behind at the same time. Even if you work up until retirement, most employer-provided life insurance covers the bare minimum expenses, like funeral costs, but it most likely won’t help your spouse make the mortgage payments or cover any outstanding debts present at the time of your passing.
So again, if you’re newly employed, congratulations! While you’re signing up for your employee accounts on those first days of your new job, don’t forget to also purchase an individual life insurance policy for added protection.
Are you ready to explore your term life insurance options? Visit our quotes page and receive up to six quotes in a matter of minutes.