NEW YORK, NY / ACCESSWIRE / November 1, 2024 / Some employers include group-term life insurance in employee benefits packages. These policies tend to offer favorable rates and are easy to manage since they're in your benefits package.
However, group-term life insurance rarely exceeds $50,000 in coverage for tax reasons. That may not be enough if you need to help protect your loved ones if you pass away.
This article explains four alternatives to employer-provided life insurance to replace or supplement your group-term coverage.
1. Term Life Insurance
Term life insurance offers coverage for a fixed period of 10, 20, or 30 years, based on your choice. Additionally, you can get short-term life insurance[ES1], which lasts for a year or less.
If you outlive the policy duration, you can let coverage expire, get a new policy, or renew the existing one at variant rates if it qualifies.
Term life insurance rates[ES2] tend to be budget-friendly, given the death benefit size. They can be helpful if you need the most coverage per dollar and don't need other complex features.
2. Whole Life Insurance
Whole life insurance helps cover you for life if you stay current on premiums. It also offers a cash value growth component that increases with each premium payment and can earn tax-deferred interest at a fixed rate.
You may be able to borrow against the cash value with no credit check at variable rates as it grows. You can also withdraw from it, although this may reduce your death benefit and could lead to tax consequences.
Whole life insurance may work if you have a larger budget and want to replace your group-term coverage rather than just supplement it.
3. Universal Life Insurance
Universal life insurance works like whole life insurance. However, you can adjust the premiums and death benefits to fit your needs. Raising the death benefit can typically increase premiums while reducing the death benefit can typically lower premiums.
This can make universal life insurance a way to get lifelong coverage to supplement group-term insurance rather than replace it since you can adjust universal life insurance coverage as needed.
4. Variable Life Insurance
Variable life insurance has the same features as universal and whole life insurance. However, you can invest the cash value in funds that hold a range of stocks, bonds, and similar securities.
This means you can potentially grow your cash value faster if your investments perform well. However, you also risk taking losses when the market declines.
Variable life insurance also lets you pay premiums with cash value when it grows enough. This can help you make coverage more favorable.
Overall, variable life insurance can balance life insurance needs and financial goals, making it a great potential supplement or replacement for your group-term life insurance policy.
Supplement Your Group-Term Life Insurance
Group term life insurance is a helpful workplace benefit but may not offer enough coverage for policyholders and their family.
Private life insurance from other insurers, such as term, whole, universal, and variable life insurance, can help fill these gaps.
Evaluate the benefits of each and weigh them against the potential premiums you'll pay. Take stock of your coverage needs as well, then shop for multiple quotes.
This will help you find the best policy type for your needs at the most favorable rates.
Content within this article is provided for general informational purposes and is not provided as tax, legal, health, or financial advice for any person or for any specific situation. Employers, employees, and other individuals should contact their own advisers about their situations. For complete details, including availability and costs of Aflac insurance, please contact your local Aflac agent.
Aflac coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, Aflac coverage is underwritten by American Family Life Assurance Company of New York.
Aflac life plans - 68000 series: In Arkansas, Idaho, Oklahoma & Virginia, Policies: ICC1368100, ICC1368200, ICC1368300, ICC1368400. In Delaware, Policies A68100-A68400. 65000 series: In Virginia, Policies ICC0965JTO & ICC0965JWO. B61000 series: In Arkansas, Idaho, Oklahoma & Virginia, Policies: ICC18B61JWO & ICC18B61JTO. In Delaware, Policies B61JWO, B61JTO. B60000 series: In Arkansas, Idaho, Oklahoma & Virginia, Policies: ICC18B60C10, ICC18B60100, ICC18B60200, ICC18B60300, & ICC18B60400. Q60000 series/Whole: In Arkansas & Delaware, Policy Q60100M. In Idaho, Policy Q60100MID. In Oklahoma, Policy Q60100MOK. Not available in Virginia. Q60000 series/Term: In Delaware, Policies Q60200CM. In Arkansas, Idaho, Oklahoma, Policies ICC18Q60200C, ICC18Q60300C, ICC18Q60400C. Not available in Virginia.
In AR, DE, ID, OK and VA: Policies ICC21-AFLLBL21 and ICC21-AFLRPL21; and Riders ICC21-AFLABR22, ICC21-AFLADB22, and ICC21-AFLCDR22. Aflac Final Expense policies are not available in New York.
Coverage may not be available in all states, including but not limited to DE, ID, NJ, NM, NY or VA. Benefits/premium rates may vary based on state and plan levels. Optional riders may be available at an additional cost. Policies and riders may also contain a waiting period. Refer to the exact policy and rider forms for benefit details, definitions, limitations, and exclusions.
Aflac WWHQ | 1932 Wynnton Road | Columbus, GA 31999
Aflac New York | 22 Corporate Woods Boulevard, Suite 2 | Albany, NY 12211
CONTACT:
Senior PR & Corporate Communications
Contact: Angie Blackmar, 706-392-2097 or ABlackmar2@aflac.com
SOURCE: Aflac
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