Is Your Life Insurance Portable?
Life insurance through work, it’s easy and convenient. You don’t have to do anything other than agree to a payroll deduction. You can even include family members. You could be in the worst physical condition possible and you get a policy (this is a down side if you are healthy-I’ll go into that later). Lots of pluses right? But what happens to your life insurance if you change jobs?
According to the Bureau of Labor Statistics, the average person will hold 10 different jobs before the age of 40. One question you must ask your HR department is, is your life insurance portable? This will tell you if you are no longer with your employer, does your life insurance policy travel with you? At the time, you may not think this is a big deal, but it may be the most important feature you may enjoy.
You graduate college at 21 and start working and get a life insurance policy through work. It’s only a few bucks a month; no big deal. Imagine bouncing around from job to job until you found the place you’re happy and comfortable at. Each time you have to fill out new paperwork and sign up for benefits, if eligible. Each time as you get older, your life insurance policy through work gets more expensive. Imagine now, you are in a relationship, married, a parent and you leave an employer for any number of reasons. What then?
If your life insurance policy isn’t portable, you have NO life insurance if you get fired, your employer goes under, you leave to start your own company, or you get a new job. What happens if your new place of employment doesn’t offer life insurance? Convenience isn’t always better. You get a better meal at a sit down restaurant than you do a fast food joint. This is why I always recommend and I will always have an individually owned policy.
Recently I met with an old client of mine that is married and has 2 children. We first met because she was interested in seeing if she could get a better deal on a new life insurance policy than the policy she had through work. Not only did her policy go up every 5 years, (premiums on her work policy were divided into age brackets) because there was no underwriting involved, her policy was issued at a Standard Smoker rating. She, outwardly appearing to be the picture of health, had that rating because group life insurance policies pool the risks. Healthy people defray the cost to insure unhealthy people. After hearing that, she was not happy and she applied for a 20 year term policy for the same face amount that she currently had. After going through full underwriting, she got the best rating available and saved over $500 year for that year and the next two. If she had kept her work policy, in the next age bracket, she would have paid more than $700 more than her new individually owned policy. By the end of her term period, she was going to save well over a thousand dollars a year.
Now imagine that you have a job you love and are at that position for any number of years. Generally speaking, people do not get healthier as they get older. People start to get heart problems, high blood pressure, high cholesterol and gain weight, all things that seem to happen more frequently as you age. If that person lost their job, getting a new individually owned fully underwritten policy would be costly. You get life insurance to protect against the unforeseen and the inevitable. If your life insurance through work isn’t portable, you should get an individually owned policy when you’re young(er) and healthy while you can, to protect against the things that you know are going to happen.
These blogs aren’t intended to try to sell you any particular life insurance product. These blogs are designed to educate and empower you. We live in the information age and no longer can insurers or big businesses hide behind a curtain like the wizard of Oz.
About the author: Anthony Veloso has been in the life insurance business for over 2 years. He enjoys coaching football, playing outside with his dog, and taking day trips with his wife and newly born daughter. Anthony is a strong supporter of Orphanages and Battered Woman’s shelters. He would love to put his experience to work for your family to ensure that you have the right life insurance policy. You can contact Anthony at 1-800-654-1953 or AVeloso@Pivot.com.