4 reasons why you need life insurance outside of work?

Most people are familiar with life insurance through their employer, but did you know that you can (and should) also have a policy that is independent of your job? Here are four reasons you should get life insurance outside of work, even if you already have coverage through your workplace.

4 reasons why you need life insurance outside of work?
John Ramsey

Key Takeaways

  • Employer life insurance policies end when employment ends.
  • The employer-sponsored life insurance plans are tailored for the employers, not you.
  • Employer life insurance is an affordable option for employees.
  • If you want the best of both worlds, it's important to supplement your employer's life insurance with a personal policy.

Table of Content

1. Employer life insurance typically ends once the worker leaves.

Employer life insurance typically terms life insurance, which only provides coverage for a specific time. If you leave your job, even if it's just for retirement, the life insurance policy will usually end. This can be a big shock for people who are used to having employer-sponsored life insurance, especially if they didn't realize that their coverage would end when they left their job. If you're planning on retiring soon, it's essential to make sure that you have an individual life insurance policy to be still covered. Otherwise, you may find yourself without any life insurance once you retire.

2. Employers generally provide only limited life insurance coverage.

Many people rely on employer-provided life insurance as their sole source of coverage, but this can be a risky strategy. Employer life insurance policies often have limited coverage, and they may not provide enough protection to meet your needs. In addition, employers usually get to choose the coverage levels for their employees, so you might not be able to get the coverage you need. Therefore, if you're concerned about protecting your family, it's important to consider other life insurance options in addition to your employer's policy. By researching and comparing different life insurance policies, you can find the coverage that best meets your needs.

3. Employer-sponsored life insurance plans may not be tailored to your needs.

Employer-sponsored life insurance plans are not always the best option for your family. While they may be less expensive than other options, they are not always customized to meet your family's needs. There are many different life insurance plans available, and each has its advantages and disadvantages. For example, some life insurance plans offer cash value, while others do not. Some plans are designed to provide coverage for a specific period of time, while others last for the policyholder's lifetime. And each insurance company has its terms and conditions that you will need to review before choosing a policy. As you can see, there is no one-size-fits-all solution when it comes to life insurance. You will need to carefully consider your family's needs and choose a policy that meets those needs.

4. After retirement, employees can lose their insurance.

Even if your employer agrees to keep you covered after retirement, they could end the agreement after you leave. For example, life insurance was terminated for every former AT&T worker who wasn't an executive even after it was promised to last until they passed. So if you're relying on your employer-provided coverage after retirement, check the fine print of your policy to understand the conditions under which it could be terminated.

What are your options?

If you want to supplement your employer's life insurance, individual policies may be suitable.

Suppose you're looking for a way to supplement your employer-sponsored life insurance plan. You may consider individual life insurance or supplemental policies such as critical illness or disability insurance. These types of policies can help fill in any gaps in coverage, and they can provide you with peace of mind knowing that you and your family are protected. There are a few things to keep in mind when shopping, such as the amount of coverage you need and the length of the policy term. Once you have a clear idea of what you're looking for, you can start comparing policies from different insurers to find the one that best meets your needs.

Make sure you have another life insurance plan before getting rid of your employer-sponsored one.

If you have an employer-sponsored life insurance plan and you want to get rid of it, there are a few things you need to do first. First, you need to make sure you have another life insurance plan. This will ensure that you are still protected from an unexpected death. Second, you need to contact your employer and tell them that you are canceling your life insurance policy. They will likely need to fill out some paperwork and may have questions for you. Finally, you need to cancel your life insurance policy with the insurance company. Be sure to follow their cancellation procedures to avoid owing money or having a lapse in coverage.

Your employer-sponsored life insurance will end when you leave your job.

Once you leave your job, your employer-sponsored life insurance will end. If you don't have another life insurance policy, you'll be without coverage. This is a problem because the older you become, the higher the premium for life insurance. So by waiting until the employer's life insurance coverage end, you will end up in the worst-case scenario, with a higher cost if you don't get any disqualifying conditions that prevent you from getting life insurance. To avoid this, it's best to get a life insurance policy before you leave your job. That way, you'll be covered no matter what happens.


Buying life insurance outside of work is essential, but you don't have to make it alone. The more information you can gather about your options, the better you'll be able to choose a plan that meets your family's needs and provides protection for them for as long as possible. If this sounds overwhelming, consider working with a life insurance agent. They can help you understand your options and find a good policy.

Frequently Asked Questions

What are the reasons for needing life insurance?

There are many reasons why someone might need life insurance. Some people need it to help financially protect their family in the event of their death. Others need it to help pay for final expenses, such as funeral costs. Still, others use it to leave a financial legacy for their loved ones.

Do you need life insurance if you don't have a job?

Yes, you can still need life insurance even if you don't have a job. If you have dependents, such as a spouse or children, you'll want to make sure they are taken care of financially in your death. You may also need life insurance if you have debt, such as a mortgage, that would need to be paid off in the event of your death. Finally, even if you don't have any dependents or debt, you may still want to consider life insurance as a way to leave a financial legacy for your loved ones.

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