When people select insurance coverage often they are fortunate enough to select from options available to them at their or their spouse’s workplace.  Group benefits are great opportunities to provide protection to you and your loved ones via health insurance, life insurance, disability insurance, and even long term care (LTC) insurance.  If some or all of these types of insurance are available to you in a group benefit setting you need to take the time and consider all of the options available to you for a couple of reasons.

Group benefits often have limited or even no underwriting when it comes protection like life insurance and LTC.  Why is this important you may ask?  In the individual sales market, life insurance and LTC insurance is fully underwritten, meaning the insurance company can look at your health and charge you more for desired coverage or even deny coverage entirely.  It is this less restrictive access to benefits that makes group life and especially LTC coverage a necessary consideration in your overall risk management portfolio.  Also because group benefits spread the risk out among many employees, they are more than likely more affordable than comparable individual benefits.  However nothing is perfect.

More often than not when the person carrying the insurance protection leaves or is terminated from employment the group benefits are no longer available.  Sometimes ownership of life insurance or LTC polices can be transferred and the insured would take on the full burden of premiums if they didn’t pay it all already.  What’s the problem with that you may ask?  Let’s say having life insurance on yourself is important to you.  You have access to affordable group life insurance and take it out on yourself.  Unfortunately your company has to downsize its workforce and you are let go.  During the time you were employed you were diagnosed with diabetes.  The life insurance on yourself at your old employer is not portable and you can’t take ownership.  Now you are out of work and uninsurable in the life insurance marketplace because of a health condition.  Fortunately, there are ways to protect you and your family from this situation.

Here at Winch Financial we are a strong proponent of group benefits for the above mentioned benefits.  However, we also think it is important to have a balance of group and individual benefits so that you are always in control of a portion of your risk management portfolio no matter what happens with your employment status.  In the above diabetes scenario if the employee had a mix of group life insurance and individually owned life insurance before he or she was diagnosed with diabetes he or she would be able to maintain privately owned life insurance as needed.

The moral of the story is to not let too much of your risk management portfolio hinge on employment that may be entirely out of your control.  It is much more advisable to take control of a portion of your risk management portfolio.  If you would like help determining the appropriate balance for you please call and schedule an appointment today.
This information is for educational purposes only and should not be considered investment advice. Please consult a licensed professional, one with a fiduciary obligation to his or her clients, before purchasing an annuity or any insurance product. Review insurance information thoroughly before purchasing. These products can include hidden fees and commissions.