Employer Life Insurance Gap Guide
Group life insurance through an employer is a helpful benefit. It's also usually capped and tied to your job. This guide helps you see the gap it can leave, and how to think about closing it.
Who this is for
- Anyone whose main coverage is through their employer
- People who change jobs, or expect to
- Families relying on one or two incomes
What you’ll learn
- How group coverage is usually sized
- What happens to it if you leave the job
- How to estimate the gap between it and your family's real need
- Options for closing that gap on your own terms
How employer coverage usually works
Group life insurance is often set at a flat amount or a multiple of your salary, such as one or two times pay. That's a meaningful benefit, and for many families it isn't enough on its own to replace years of income, pay off a mortgage, and fund future goals.
The part people miss: it may not follow you
Group coverage is usually tied to your employer. If you change jobs or leave, it often doesn't come with you, and the option to convert it can be limited or more expensive. Coverage you own personally stays with you regardless of where you work.
Estimating the gap
A simple way to see the gap is to compare the total coverage you'd want with the amount you have through work. The difference is the gap you might choose to close elsewhere. Our Employer Coverage Gap Calculator can give you a rough starting number.
Your gap checklist
- How much coverage you have through work, in dollars
- Whether it's a flat amount or a multiple of salary
- What happens to it if you leave the job
- The total coverage you'd actually want for your family
- The difference between the two, which is your gap
Common misunderstandings
People often think: The coverage through my job is enough.
In reality: Group coverage is a helpful start, but it's often capped well below what a family would actually need to replace income and clear debts.
People often think: My work coverage will always be there.
In reality: It's usually tied to your employer, and it may not follow you, or may cost much more, if you change or leave the job.
People often think: Employer coverage and a personal policy are basically the same.
In reality: One depends on your job; the other you own and control regardless of where you work.
Your next step
If you spotted a gap, the next step is deciding how much of it to close, and how. A Personal Wealth Review helps you size it and see your options calmly, whether you act now or later.
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Educational only. Life insurance is subject to underwriting approval. Guarantees are subject to the claims-paying ability of the issuing carrier. NOI does not provide tax, legal, or investment advice.