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EMPLOYER PROVIDED INSURANCE
How many times have you or
someone you know uttered the phrase, "I've got life insurance at work." Usually,
you say this in an attempt to get rid of that pesky insurance salesperson.
Unfortunately, for far too many
people, the only life insurance they have is through their employer. If you
think this is a wise decision, just ask the many Sears retirees who were
promised lifetime coverage and have seen their benefit slashed dramatically. Or
the old Wisconsin Steel workers who watched their benefits disappear with the
mill.
I have developed benefit plans
for many companies over the years and 99 times out of 100 the company would
reduce benefits or pass on higher premium costs to save the company money. It's
nothing personal, it's just good business considering that all employee benefits
cost your employer close to 40% of payroll.
Most employers use a group term
plan to provide your life insurance coverage at work. The majority of plans
provide either a specified death benefit or 1 to 2 times your annual salary. The
death benefit reduces by 50% at age 65 and usually disappears at age 70. (These
figures can and do differ from company to company). Of course, if you are caught
in a downsizing or rightsizing or just plain old fired, your life insurance
benefit is gone, just like your job.
The answer is to take advantage
of the benefits offered by your employer, but make sure you purchase your own
life insurance coverage. One to two times your annual salary is not enough of a
death benefit to provide for your family. Contact your favorite PRCUA deputy for
information on how much life insurance you need and how affordable it can be. Do
not shortchange your family or yourself.
One last tidbit on employee
benefits. If your employer has a 401K make sure you participate but if your
monies are invested solely in your employers stock, watch out! If the company
stock price goes down, so do you. |
