Is Life Insurance Through Work Enough?

Quick answer: For most families, no. Group life insurance through work is often a flat amount or one to two times your salary, and it usually ends when you leave the job. It's a good start, but it rarely covers a mortgage, years of lost income, and the kids' futures on its own.

Why so many people stop at work coverage

You checked a box during open enrollment. Now there's a line on your benefits page that says "life insurance," and it feels handled.

It's a real benefit, and it's better than nothing. It just usually isn't built to carry a family on its own.

Reason 1: The amount is usually small

Many employer plans give you a flat amount or a multiple of your salary, often one or two times what you make. If you earn $60,000, that might be $60,000 to $120,000.

Now compare that to what your family would face: the rest of the mortgage, car loans, everyday bills, childcare, and years of income that stopped. For most families the gap is big. Our guide to how much coverage you actually need walks through the math.

Reason 2: It usually ends when the job does

Group coverage belongs to the employer's plan, not to you. If you quit, get laid off, retire, or the company changes plans, the coverage usually goes with it. Some plans let you convert or port it, but that often costs noticeably more.

That can leave you shopping for a policy later, when you're older and possibly dealing with health issues that make coverage cost more or harder to get.

Reason 3: You don't control it

Your employer picks the carrier, the amount, and the terms. They can change them. A policy you own yourself stays with you no matter where you work.

Is work coverage ever enough?

Sometimes. It might be enough if:

• Nobody depends on your income
• Your house is paid off and you don't carry much debt
• You have savings or investments your family could live on

If that's you, great. Keep it and don't let anyone talk you into more than you need.

How to tell if you have a gap

1. Look up your work coverage amount on your benefits portal.
2. Add up what your family would need: the mortgage balance, other debts, and a few years of your income.
3. Subtract what you have through work and any other coverage.

Whatever's left is the gap. If it's about your house, our mortgage protection calculator does the math with your own numbers.

The bottom line

Keep your work coverage. Just don't count on it to do the whole job. A policy you own fills the gap and stays with you when jobs change. If you already have enough, we'll tell you that too.

This article is general education, not advice for your specific situation. Coverage, pricing, and policy features vary by carrier, state, age, and health, and every policy is subject to underwriting approval.