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Why you need life insurance outside your job

Updated: Feb 18, 2023

Company-funded life insurance is a type of insurance coverage afforded to you as an employee by your employer. Another name for it is group life insurance. Many benefits accompany this particular type of insurance package depending on certain factors peculiar to your financial situation. While it is wise to capitalize on a life insurance package of this nature issued by your employer, there are, however, limitations, and that is why it is essential to have one outside your job. Here are some advantages of having a life insurance policy outside your job.

1. Coverage Continuity: If you lose your job or change employment, the life insurance coverage provided by your employer may not continue. Your life insurance policy ensures that you and your loved ones are protected regardless of employment status.

2. Customizable Coverage: Employer-sponsored life insurance policies are often limited in coverage. By purchasing this policy, you can select the coverage amount that meets your specific needs and budget.

3. Portability: Life insurance policies obtained through an employer are often tied to the employer's plan. If you leave your job, you must start from scratch with a new approach. Having your policy, on the other hand, allows you to take your coverage with you, regardless of where you work.

4. Flexibility: Life insurance policies purchased outside an employer's plan often offer more flexible payment options and a more comprehensive range of coverage options, such as term or permanent life insurance.

5. Estate Planning: Life insurance can be a valuable tool for estate planning and help ensure your assets are distributed according to your wishes. By owning your policy, you have greater control over your beneficiaries and how your death benefits will be used.

6. Tax Advantages: In some cases, the death benefit from a life insurance policy may be tax-free, providing an added advantage over other types of investments.

7. Job security: Your life insurance coverage through your job could end if you leave your employment or if your employer stops offering the benefit. A separate life insurance policy ensures coverage even if you change jobs or lose your job.

8. Coverage amount: The coverage amount provided by your employer may not be enough to protect your loved ones fully. Having a separate life insurance policy allows you to choose the amount of coverage that is right for you and your family.

9. Customization: With a personal life insurance policy, you can choose the coverage options and features that are most important to you, such as the length of coverage, the payment structure, and the type of policy.

10. Cost: The cost of life insurance coverage through your employer may increase as

you get older, whereas a personal life insurance policy can be locked in at a specific rate for the length of the policy.

Overall, having life insurance outside of your job provides you with additional security and flexibility, allowing you to make sure your loved ones are fully protected no matter what the future holds.

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