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Is the Life Insurance They Offer at Work Enough?

Video Transcript

Hey, this is Chris with Money Burst, and today let's tackle a question that we probably all should be asking ourselves. And that is: Is the life insurance that I get from my job enough? For many of us, this is the only life insurance policy we have. So, it's time to take a closer look at this benefit.

Work-provided life insurance policies are often referred to as group life insurance and they're a great benefit and typically cover somewhere around one to two years of your salary. And the great thing is they may be free, or at the very least pretty cheap options. Plus, you usually don't need to take a medical exam or fill out a ton of personal information on the survey.

But the thing to keep in mind is that this might not be enough coverage for everyone out there. You should think about the people in your life who would rely on your financial support if you were to pass. Like, for example, your spouse who will still need to pay the mortgage or rent. Or your kids who could still need help paying for college. One to two times your salary probably isn't enough to cover all of these situations.

Another thing to consider is the ability to keep this life insurance policy if you were to change jobs. Many of these policies aren't what they call 'portable.' Meaning, you only get to keep it if you stay with your employer. Now, you may have the option to convert it to a personal policy, but it could cost you more money.

There's nothing wrong with carrying life insurance through your job, but it's a smart idea to take some time to evaluate your situation to see if you need additional coverage.