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Life Insurance Through Work? Do the Math. Spoiler Alert-It’s Expensive!

One of the most common objections to life insurance we hear is, “I have it at work.” No one ever, EVER says “It’s too expensive.” That’s probably because it’s not.  For something so important to your family, most people know that their family will never miss $15-$75 per month, but they will most DEFINITELY be destroyed if something happens to them and their entire income is gone forever.

Let’s look at why the supplemental life insurance you can get at work can be more than 4 TIMES the cost of a Farmers life policy at our best rate, and more than DOUBLE the cost of a life policy at a mid-level health rating.

*For this example, I used the actual rating table from the Texas school district plans for ISD employees (see below).

We also don’t usually come up against someone saying they don’t need it.  You do. I do. We all do.  As they say, the only thing certain is death and taxes. We talk with people, maybe like you, who have trusted the financial future of their family to a group life policy through a job.  A job you may leave.  A job you may be laid off from.  A job you may grow to despise and want to leave. When you own your life insurance policy, none of that matters.  That’s why we recommend you and your spouse each own a life insurance policy.

Should you choose supplemental life insurance at work or purchase a policy outside of work that you own?  Let’s do the math…

As an example, here is an illustration of supplemental life insurance costs for a 45 year old teacher. Teachers only have $10-$15K coverage through the school district included in their benefits, so additional coverage is definitely needed to protect a family.

At our best rate, Platinum Elite, a $250K 20 year term policy is only $33.52 per month, or $402.24 per year.  However, with our auto/home/life discount, the home and auto discount is $84 per year for a Net Total of $318.24 per year. Over a 20 year period, the Net Cost of this life insurance protection is $6,364.80. At our mid-level rate of Platinum Choice, the Net Cost over a 20 year period is $12,914.40.

In contrast, here is an example of a supplemental life policy available at work.  The premium increases every 1-5 years with age.  These are the actual calculations used by local school districts in Texas where the premiums increase every 5 years:

  • Age 45-49 – .156 X 250 = $39 per month
  • Age 50-54 – .286 X 250 = $71.50 per month
  • Age 55-69 – .546 X 250 = $136.50 per month
  • Age 60-64 – .286 X 250 = $195 per month
  • That’s a total of $26,250 spent for a $250K life insurance policy for 20 years.  This is more than 4 TIMES the cost of a Farmers life policy at our best rate, and more than DOUBLE the cost of a life policy at a mid-level health rating.

I encourage you to take a look at what protection you have through work and what it actually costs, ask your HR department what happens to the coverage and premiums:

  • as you age
  • when you retire, and
  • when you turn age 70

I think you may be surprised.

I advise you to get all the FREE life insurance you can at work.  But it may not be a good idea to rely on it for the supplemental coverage that meets the long term needs of your family.  After all, 1X your salary will cover your family for 1 year.  3X your salary will cover your family for 3 years.  Then what will they do? Sell the house? Move to an apartment? Give up on college?

Are you ready to protect your family with life insurance?  We can tailor a plan to meet your needs and your budget.  Fill out this brief application to get started today!


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