The stapler isn’t the worst thing you might leave behind at your old job!
Many Americans get their first job, or start a new one, and sign up for benefits like medical insurance etc. Some companies also provide life insurance, usually a basic policy that the employee can increase.
These policies can be great when starting off, especially since buying life insurance SUCKS, and no one REALLY wants it anyway. If your job has a benefit, then why not? Check it off the list and feel like a responsible adult.
Until you decide to change jobs.
Then you find out, that in most cases…you can’t take your life insurance with you.
No big deal. Right? Maybe not. What if you had that job for several years? Now you’re several years older and if you’ve had any health issues, you might face greater challenges getting coverage on your own if your new job doesn’t offer the benefit.
What’s more, if your old life insurance benefit is portable, in many cases, it’s much more expensive when you take it with you, than if you bought your own policy anyway. So even if you CAN take it, you might not want to because it’s unaffordable. The reason for the price increase is that your employer likely had a “group” life insurance policy that spread out the risk across the whole company. When you leave, you’re flying solo so there isn’t a way for the insurance company to spread out their risk, thus you pay more.
There are some good points to having this group life coverage. It’s cheap. It’s easy. It doesn’t require you to get stuck with a needle or pee in a cup. But it’s generally not enough coverage, and again, it’s inflexible if you change jobs. Many also limit the amount of coverage you can get.
So, what’s the solution?
Purchase a fully underwritten policy of your own! Generally, a term insurance policy is used to cover larger risks like your mortgage, income, college expenses etc. Your health class will determine the cost, along with your family history. So the best solution is to buy as much as you THINK you’ll need in the future NOW while you’re young and healthy.
“But I’m old and not very healthy.” You say? Well, you ain’t getting any younger! So if you only have life insurance through work, or just need more for your family, buy it now. Life insurance will never be cheaper than it is today.
Will Parrish is a founding partner of Slate, Disharoon, Parrish and Associates, LLC, located in Knoxville, Tennessee. Feel free to contact Will with questions via email will@sdp-planning.com or directly by phone at (865) 357-7373. Visit their website, sdp-planning.com, or connect with Will on Linked In at linkedin.com/in/willparrish/.
Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisers, Inc., a Registered Investment Advisor. Slate, Disharoon, Parrish & Associates, LLC and Cambridge are not affiliated. Cambridge does not provide tax advice.