Policy Types

Supplemental Life Insurance through Your Workplace

This article discusses supplemental life insurance when it's a part of your employee benefits package. Find out what type of policy you have, the limit, and how your death benefit is determined.

What is Supplemental Life Insurance

As part of your employee benefits package, many employers also offer a variety of ancillary or supplemental insurance coverages and may include dental and vision, as well as life insurance. Often, these benefits are offered to employees for little or no charge, and can be a good way to take advantage of some additional protection. In fact, a recent study conducted by the Life Insurance and Market Research Association (LIMRA), found that nearly 20 percent of consumers who shopped for life insurance went through their place of work, and 75 percent actually made a life insurance purchase.1

What you need to know about Supplemental Life Insurance

If you have employer sponsored life insurance, take the time to find out exactly what type of policy you have, the limit, as well as how your death benefit is determined. Here’s why…

It may not be enough coverage.

Many life insurance policies through employer plans are typically only one or two times your annual salary. For many American’s this limit isn’t nearly enough to meet their needs in the event they were to die unexpectedly.

It’s a limited accidental death and dismemberment (AD&D) insurance policy.

An AD&D policy shouldn’t be confused with a standard life insurance policy. Although an AD&D policy does provide benefits to your beneficiaries when you die, the caveat is that your death must be caused by an accident. Although AD&D benefits will vary among insurers, most will also payout benefits if you were to lose a limb, eyesight, or hearing as a direct result of an accident.

It’s a burial insurance policy.

You may find that your life insurance through work is a type of burial insurance policy. Typically, these policies have a very low benefits associated with them that could be anywhere between $5,000 and $10,000. The purpose of these policies is to provide your family with enough money to cover your final expenses when you die.

Any life insurance is better than none at all. So if the supplementary life insurance offered through your employee sponsored group plan is affordable and can be of benefit to you and those you love, then it may very well be worth the price.

1. http://www.lifehealthpro.com/2012/04/11/limra-1-in-5-americans-shop-for-life-insurance-thr

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All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax‐related decisions. For information about Protective Life and its products and services, visit www.protective.com.

Supplemental Life Insurance

Supplemental life insurance can be a good way to get some additional life insurance through your employer's group benefit plan. However, it's important to take the time to fully understand what type of supplemental life insurance policy you have at work, so that you can make an informed decision about whether or not you should buy a life insurance policy independent of what you may have at work. For more information, visit our learning center.