The Truth About Life Insurance Through Work vs. Private Policies
Life insurance is one of the most important financial tools you can have to protect your loved ones. But when it comes time to enroll, many people wonder: Is the life insurance offered through work enough?
While employer-provided life insurance is a great benefit, it’s not always the best, or only solution. Understanding the differences between life insurance offered through work and private life insurance can help you make a more confident, long-term decision.
What Is Life Insurance Through Work?
Employer-provided life insurance (also called group life insurance) is coverage offered as part of your employee benefits package.
How It Works
- Usually term life insurance
- Coverage amount is often 1–2 times your annual salary but can be lower.
- Premiums are low or free because they’re subsidized by your employer
- Enrollment is easy, often with little or no medical underwriting
Pros of Life Insurance Through Work
- Convenient and automatic enrollment
- Affordable or employer-paid
- No medical exam required in most cases
Cons of Life Insurance Through Work
- Coverage is often limited and may not be enough for your family’s needs
- You typically lose coverage if you leave your job
- Limited ability to customize beneficiaries, riders, or policy length
- Coverage amounts usually increase in cost as you age
What Is Private Life Insurance?
Private life insurance is a policy you purchase independently through an insurance agent or company. You own the policy, not your employer.
Types of Private Life Insurance
- Term Life Insurance – coverage for a set number of years (10, 20, 30)
- Whole or Permanent Life Insurance – lifetime coverage with potential cash value
Pros of Private Life Insurance
- You own the policy, regardless of job changes
- Higher and customizable coverage amounts
- Locked-in rates (especially with term life)
- Ability to add riders (child rider, living benefits, etc.)
- Long-term financial planning flexibility
Cons of Private Life Insurance
- Requires an application and sometimes a medical exam
- Higher upfront cost compared to group coverage
Is Life Insurance Through Work Enough?
For most families, employer-provided life insurance alone is not enough.
A general rule of thumb is to have 10–15 times your annual income in life insurance coverage. Employer plans often fall short, especially if you have:
- Children or dependents
- A mortgage
- Student loans or other debts
- A spouse who relies on your income
Should You Have Both?
In many cases, the best strategy is having both:
- Use your employer-provided life insurance as a supplemental benefit
- Secure a private policy for long-term, reliable coverage
This approach ensures your family stays protected no matter what happens with your job or career.
Final Thoughts
Life insurance through work is a great starting point—but it shouldn’t be your only plan. A private life insurance policy gives you control, stability, and peace of mind that lasts beyond your employment.
If you’re unsure how much coverage you need or which option is right for your situation, speaking with a licensed insurance professional at Feliciano Jiron Insurance Agency can help you make the best decision for your family’s future. Give us a call at 702-522-0079!