Supplemental life insurance is an additional form of coverage that can fill in the gaps offered by your standard life insurance policy. It is often used when an employer offers life insurance as part of a benefits package but it doesn’t provide enough coverage to fit your needs. Group life insurance coverage through an employer is usually a generic plan that provides the same benefits regardless of the individual. Since it’s not specialized to your specific needs, it often doesn’t cover all the necessary bases.
Group life insurance often only provides coverage in the amount of one to two time’s the person’s salary while it’s often recommended that a person, particularly one with dependents, has coverage of five to eight times the annual salary.
What Does Supplemental Life Insurance Cover?
Once you reach the limit on your standard life insurance policy, supplemental life insurance will take over and make sure your family’s needs are met For instance, if your life insurance policy doesn’t leave enough money to cover the cost of your mortgage, supplemental life insurance can provide extra money to help your loved ones pay the bills. In some cases, it can also be used to cover basic cost of living expenses, especially if the deceased had a high income that its dependents were used to relying on and the basic insurance fails to meet those needs.
Who Needs Supplemental Life Insurance?
For a single person who doesn’t own a home and has little to no debt, a standard life insurance policy is usually enough to cover death expenses. However, if you’re married, have kids, own a home or have a significant amount of debt, supplemental life insurance can make sure that your family is taken care of in the event that something happens to you and isn’t stuck with the financial burden.
How Much Does Supplemental Life Insurance Cost?
While a company’s life insurance policy is all encompassing and provides the same amount of coverage for everyone regardless of age and health, a supplemental life insurance policy takes these factors into account. In order to get a supplemental life insurance quote, you’ll likely need a medical evaluation to determine your current health level before receiving a cost estimate of supplemental insurance.