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- Corporate life insurance, that is to say, life insurance provided either free or at a reduced rate by your employer, is a valuable benefit. However, you shouldn’t rely on corporate life insurance alone to take care of your family in the event of your passing, as we explain below.
4 Reasons Why You Need More Than Your Employer-Provided Life Insurance
As we stated in our opening sentence, company-funded life insurance is a valuable benefit, and we encourage people to choose employers who offer this perk. But we also think it’s a good idea to supplement your corporate policy with a personal one, for the following reasons:
- Corporate Policies Are Not Portable – If you decide to leave your current employment, your life insurance policy will be terminated, leaving your family unprotected. Alternatively, your employer could choose to make you redundant at some point in the future, with much the same result as far as your life insurance coverage is concerned.
- You Cannot Choose the Sum Assured – Your company decides what the sum assured will be when providing life insurance to employees. If it’s not enough to take care of your dependants, buying another policy is the easiest solution.
- Your Policy May Be Altered, Reduced or Cancelled – Corporate life insurance policies can be altered, reduced or cancelled by employers at any time. If you want a safety net your family can rely on, personal Best life insurance is more convenient.
- You Cannot Choose Policy Additions – When you invest in a personal policy, you’re free to specify add-ons such as critical illness cover but this is not possible with corporate life insurance. For complete flexibility, personal policies are the obvious answer.
In some cases, it may be possible to negotiate exceptions, either directly with the insurer or through your employer, but it’s not typical. In the majority of cases, the easiest way to ensure your dependants are well provided for is to purchase a separate, personal policy.
Finding the Best Insurer and Life Insurance Policy
The life insurance market varies to a certain degree from one country to the next, which makes it difficult to provide definitive recommendations. However, wherever you are, we urge you to make sure that any insurer you do business with is:
- Licensed
- In Good Financial Standing
- Well Established
If you’re shopping for life insurance in Australia, the company you choose should also provide you with a Product Disclosure Statement (PDS). A PDS contains details of an insurance product’s key features, including benefits, costs, terms, conditions and exclusions. A life insurance policy accompanied by a comprehensive PDS is much easier to evaluate.
Next Steps
If you’re ready to invest in a personal life insurance policy, we recommend researching the market in your part of the world, talking to your family about your plans and taking some time to think things over before making a decision. If you’d like to discuss the matter with a professional, an independent financial advisor or experienced accountant should be able to help.