How Much Life Insurance Can You Get Through Work?

As a part of employment benefits, employers may offer you life insurance. Such life insurance is also known as group life insurance since your employer pays a single premium for a group of employees. In some cases, you may also require to pay a part of the premium depending on the company’s policy. Complimentary life insurance through work can appear to be a lucrative deal. However, you need to consider whether you are getting enough coverage through it or not. For young individuals with no family liability, getting employer-provided life insurance in the package can be a fair offer in their new job. 

However, considering the coverage amount in group life insurance, an individual with a dependent family cannot entirely rely on employer-provided life insurance. They need to analyse the cost and benefits and may also need to purchase supplemental insurance to meet their financial needs.

Understanding a Group Life Insurance in UAE

Similar to personal life insurance, group life insurance intends to protect your family financially in the event of your demise. If you have contracted a group life insurance, your employer pays a monthly premium fully or partially. You may need to pay a fraction of your insurance premium if your employer pays only a part of the premium. Usually, the group life insurance premiums are affordable and won’t be a financial burden. The group insurance coverage continues till your employment contract ends and is non-portable. 

How Much Group Life Insurance Can You Get Through Your Work? 

The insurance coverage through work varies depending on the companies and so does the premium. Employer-provided life insurance can cover 2-3 times your annual salary, while experts suggest that you need coverage of 5-10 times your annual income. If you have already forecasted your financial requirements and find group life insurance coverage to be enough, it is a fair option for you. Individuals with a dependent family or debts need to consider supplemental life insurance as an add on. You may also choose to buy personal life insurance that offers a larger coverage amount with numerous other benefits.  

Does Group Life Insurance Worth for What You Pay?

Group life insurance is affordable, sometimes free. If you only consider the cost of employer-sponsored life insurance, you are getting life cover as an employment benefit. Numerous employers don’t ask for prior medical check-ups for the insurance benefits. Also, it is hassle-free to avail of a group life insurance since you don’t need to compare life insurances, search for their quotes, etc. 

Although the group insurance plan is easy to avail, it does not provide adequate insurance coverage. Instead, you can buy life insurance in UAE for yourself at a much affordable cost, providing comprehensive protection to you and your family. 

It is of much importance to buy life insurance that covers the cost of your liability and replaces your income when you are gone. In addition, your coverage must be enough to cover your funeral cost, ongoing debts, education for your kids, etc. With just 2-3 times your annual salary, group life insurance is not enough to tackle adverse situations. And not to forget, losing your loved ones can take years to recover, both emotionally and financially.  

Does Group Life Insurance Covers You When You Change Your Job?

Financial situations keep on changing and may demand you to shift your job. Relying entirely on your employer-sponsored life insurance can expose you and your family to risks. It is so because the employer pays a single premium for the group of employees. Hence, your insurance plan is non-portable. Once you shift your job, your group insurance from your previous employer is not liable to pay you any benefits. In certain cases, you may have the option to transfer the life insurance plan, but that will require a hefty amount.  

Knowing that group life insurance can help you in the short term, you can choose personal life insurance or term life insurance for long-term security. Also, the earlier you buy life insurance, the lower premium you pay. It is because as a young individual you are healthy and possess lesser risks in comparison to older people. 

How to Get the Right Insurance Coverage for Yourself?

Getting group life insurance without extra cost is good as long as you don’t have financial dependents. The employer-provided life insurance provides inadequate coverage to meet your family’s needs. Hence, it is important to calculate your financial requirements and check whether you require additional life insurance or not.

You can consider buying term life insurance or traditional life insurance. Term insurances in UAE are one of the most affordable life insurance plans and offer comprehensive coverage. You may also consider buying a life insurance plan which has a considerably low premium for younger individuals. 

Conclusion

Although getting group life insurance from the employer provides you financial security, you cannot entirely depend on employer-sponsored life insurance. The insurance is just an employment benefit and the coverage provided is inadequate for your family’s needs. Therefore, considering supplemental insurance or buying personal life insurance in UAE can provide better security in your family’s tough times.