A company-provided life insurance policy is a great benefit to have. It can help you protect your family if something unexpected happens. It can also provide cash to ease the burden of financial obligations after a death.
However, what happens if your company’s coverage isn’t enough? It may seem like an insurmountable problem, but there are options available for those who need more life insurance than their employer provides.
#1 Get an Individual Life Insurance Policy
If your company does not offer sufficient life insurance coverage, there are many ways to add on more protection for your family. One way is through a policy from an individual life insurance company. This type of policy is similar to group insurance in that it will pay out a death benefit if you die during the term of the contract. However, unlike group plans, it is purchased and managed by an individual.
Individual policies have their own requirements, such as how much coverage you need and what type of policy best fits your needs. If these policies are right for you and your family’s situation depends on many factors, including:
- How big a death benefit do you want?
- What amount of monthly income would be necessary if someone were to die?
- Is there a maximum amount of years between each payment?
#2 Start a Savings Account
If you’re not saving for retirement and your company’s life insurance plan doesn’t provide enough coverage, consider opening a savings account. The interest from these accounts will help add to the amount of life insurance you can buy in the future. Talk to your human resources department about setting up an automatic transfer from each paycheck into this new account.
This is also a good way to train yourself how to save money regularly without feeling like it’s too much of a sacrifice up front. Automatic transfers make saving easy by making it invisible. They’ll even lower the amount to avoid overdraft fees when there isn’t enough money in the account.
#3 Invest in Assets
This is a good idea if you are disciplined enough to invest wisely and have the money to do so. If your company’s life insurance does not provide sufficient coverage, it’s important to look at your assets and figure out what you can do with them.
For example, say you have $300K in assets that are currently sitting in a savings account, earning 1% interest per year. By investing those assets into something like an index fund or bond fund that has historically delivered higher returns than 1%, it will be easier for you to get more coverage for yourself and your family. The income from those investments could be used as collateral for additional life insurance.
#4 Change Jobs
You’ve got options. You can try to convince your employer to change its life insurance policy, but it’s unlikely that you will be successful, especially since most employers don’t even know that their policies are insufficient.
Or, you can look for a new job with a company that provides superior life insurance coverage. This may require moving and leaving behind your current social circle, but it could be worth it if the new job comes with better pay or benefits. Who knows, maybe you’ll find an even better work-life balance there too.
Just think about what kind of life insurance policy would be best for you in terms of coverage and cost before making any decisions. Study the company insurance policies first since that’s your priority going into the new job if you choose to do so.
#5 Start a Side Hustle
If your current life insurance policy is not enough to cover your family’s needs, consider starting a side hustle. It’s a second job that can be done in addition to your primary full-time job. It can provide additional income, which may help you save for future expenses or invest for retirement.
Side hustles come in many forms. They often start when someone has an idea for something they want to create but doesn’t have the time or resources available to do so. Some people turn their hobbies into side hustles, for example, by selling handmade crafts online. Others use their professional skills on the side by doing freelance work or consulting on the weekends or evenings to bring in extra cash flow.
It’s important to note that these are just a few of the options you may have if your company’s life insurance does not provide sufficient insurance coverage. You should always explore all of the options available before making any decisions about how to proceed. Since each person’s financial situation is different, there may be other solutions that work better for you and your family than the ones we’ve listed above.