Where to buy life insurance

May 11, 2012

It may be better to buy life insurance when young.

While many employers offer a life insurance option for employees to purchase, The Wall Street Journal said this may not be the best option. Even so, a recent survey by LIMRA shows that an increasing number of people are starting to buy life insurance through work. The LIMRA U.S. Life Insurance Buyer-Nonbuyer study shows that 20 percent of people who shop for life insurance still go through work and 75 percent of workplace shoppers buy life insurance.

“More and more people are turning to their place of work to get the financial products they need,” said LIMRA Group Product Research Analyst Kim Landry. “Clearly, the convenience of having the resource at their place of work coupled with the feeling of security felt by working with someone their employer has (implicitly) approved, [is]drawing consumers to this channel.”

The Wall Street Journal said employers typically get life insurance at a group rate, which may mean a lower premium for employees. Some companies will even give free coverage, but most often, people will get basic benefits and have the option to buy additional coverage. Jon Dressner, senior vice president of the Life and Health Insurance Foundation for Education, told the newspaper that this could be a good move for people who may not be in the best health that couldn't get rates this good otherwise.

Even with all of these positives, Dresser said there's often a coverage limit that would be equal to annual income with an option to raise it to a half-million dollars. If someone wanted additional coverage, they would most likely need to buy an extension of the work policy or buy their own additional policy, according to The Wall Street Journal. Dresser said for those who are young and healthy, an individual policy may be the best move to make.

"You have to hope they have a group plan that you can easily get into, and you have to hope that it’s going to be affordable," the website said. "If you don’t have those options available that’s why you would want to consider having life insurance through a third-party provider. That way if you do change jobs you’re already locked in. You don’t have to worry about it."

People need to look at their own individual situation and what their life insurance needs are. Sometimes, work life insurance can work out very well, but people need to be flexible and know that more often, additional coverage is needed.


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