Last Updated on December 11, 2024
Chances are, your employer has offered you the opportunity to buy into their group life insurance policy. Perhaps the group life insurance policy accepts people with Type 1 or Type 2 Diabetes without any issues. Maybe they’ve offered you the opportunity to purchase a modest life insurance policy for your spouse, too.
The cost of the premiums are affordable for your level of income and usually, no medical exam is required. Maybe you’ve even been provided a $100,000 policy at no cost to you. Sounds adequate, right?
After all, $100,000 is quite a bit of money to a middle-class family. Unfortunately, even a sizeable six figure policy may not be enough. In fact, many financial analysts and insurance agents recommend purchasing more than five times the amount of your annual income.
All too often people assume that when a spouse passes unexpectedly, that they are losing an income – and they’re right – partially. You see, the loss of a spouse, aside from the emotional loss, also comes with a huge financial loss – more-so than just an annual salary.
When financial planning for the unexpected, people often fail to take into account the loss of bonuses, healthcare benefits, and other sources of income that will also be lost in the event of their spouse’s passing. So, that $100,000 that once made it seem as though your employer was really taking care of you, doesn’t sound so sufficient anymore, does it?
Have you ever considered the portability of your employer provided life insurance policy? How secure is your career? If your company closes, you’re let go or laid off, or if you are faced with the difficult choice of having to leave your job due to a decline in health, will you be able to maintain your group policy provided through an employer that you no longer work for? Chances are, probably not.
A big problem with employer provided life insurance policies is that they are really only helpful, to some degree, when you’re employed through the entity that offered you the group buy-in opportunity. If you’re considering a career change, don’t have solid job security, or any of the aforementioned scenarios should occur, your family may not be protected.
Maybe you’re thinking, “I’ll just get a private life insurance policy if I leave my job.” Think again. What if you’re not healthy enough to obtain a policy at an affordable premium? What if you’re not eligible at all? It is impossible to determine what your health, and what type of control of your Diabetes you’ll have in the future.
It’s never a good idea to bank on unpredictable factors like health, job security, or life expectancy. When it comes to protecting your family financially through the purchasing of life insurance, it’s best not to leave anything to chance – avoid allowing gaps in your life insurance coverage.
Luckily, as a diabetic, you can find affordable diabetes life insurance and you may want to consider this even with your company provided policy. You would have several options available to you, outside of the workplace. Simply contact us, or do an online inquiry. One of our agents will share with you all the possible diabetes life insurance options available to you. Diabetes 365 was established to help families navigate the diabetic life insurance marketplace.
We all want what is best for our families – and when we’re offered a policy with the potential to provide further security for our family, it’s easy to be blinded by the luster of the comfort that accompanies the peace of mind.
It’s important to consider all expenses, all financial losses, policy portability and to fully consider the grieving process and its financial impact when determining whether your company life insurance policy is sufficient. You may be surprised by the mass of more cost efficient, higher coverage policies that are available to you.
3 Reasons for Buying Group Life Insurance Through Work
Usually, there are three main reasons to buy a group life insurance policy.
Convenience
Generally it’s easy to apply, and to be accepted for group life insurance if you have Diabetes. And there probably isn’t a medical exam required to qualify. It’s probably a good idea to visit with a HR representative to see if the policy will accept people with Type 1 Diabetes or Type 2 Diabetes.
Affordability
Most group life insurance policies are generally fairly inexpensive. Since the group policy is covering people with, and without Diabetes, the rates may be lower than a policy you would take outside of the workplace.
Eligibility
Depending on the group life insurance provider, they may accept everyone, no matter if you have Diabetes, or other severe health issues. Perhaps, this may be the ONLY type of life insurance policy you would qualify for.
Main Disadvantages of Group Life Insurance
While having a group life insurance policy with Diabetes sounds like a good idea (it usually is), there are some downsides to these plans. Especially if it is the ONLY life insurance policy you own.
- Most people will not stay with the same employer for their entire life or career. If you leave your employer, the policy may not be portable and travel with you. Or they may provide a conversion options, that is expensive, and not in your best interest. Perhaps your next employer may not offer group life insurance. Or maybe the policy will not accept people with Diabetes, or people with diabetes complications. Do you really want to take a chance on protecting your family with life insurance, and not know if it will be there for you 10, 20, or 30 years down the road???
- Group policies usually won’t offer you multiple types of life insurance policies. Meaning you won’t be able to choose from a term life insurance policy or a whole life insurance policy. When you ‘shop’ for life insurance for diabetics outside of the work place, you can choose the exact policy that is best for you and your family.
- Your group policy may put a limit on how much life insurance they offer. As example: Maybe your employer caps the coverage at $250,000. Perhaps you need $750,000 of life insurance. In this situation, you’d be underinsured.
- With group life insurance, your rates are not guaranteed. The life insurance company that your employer uses, may change at any time. Or, the carrier could increase the rates, for everyone involved with the group. This could impact you at a future date, and perhaps make your diabetes life insurance policy too expensive for you to keep.
When you take out a policy outside of the work place, you can take out a term life insurance policy with guaranteed rates, for a term period you decide on. Or if you prefer a permanent life insurance policy, you could establish one with guaranteed premiums. That way there’s no surprises for you, at a future date.
Is Having Group Life Insurance Coverage Enough?
Don’t get us wrong group life insurance is a great ‘perk’ that companies provide. Especially with having Diabetes, many companies life insurance providers still offer coverage, but it is NOT ENOUGH.
Your employer may even offer FREE group life coverage, which is awesome! That’s something you definitely want to take advantage of. However, you need to take a step back, analyze your current, and future situation, and think about the ‘what if’s’ and lack of guarantees these group plans provide.
Here are some reasons most people take out life insurance. You probably have a mortgage, or outstanding student loans. Maybe you want a life insurance policy to offset burial costs and final expenses. Burial insurance for diabetics is easy to obtain. The average funeral is costing close to $10,000. If you only have a group life insurance policy, can you guarantee it will be in place to address all of these expenses? Probably not.
Most financial experts tend to recommend having enough life insurance to cover all of your debts, and to replace at least 10 times your annual salary. Does your group policy provide this amount to you?
You would also want to ask yourself: “ If I lost group life insurance coverage at a point in the future, could I even qualify for life insurance with Diabetes? If so at what rates?” If you have Type 2 Diabetes, life insurance for Type 2 diabetics is a little easier to obtain. With Type 1 Diabetes, you’ll have options, but not as many as Type 2 diabetics. Taking out a policy that you OWN outside of the work place is much cheaper when you are 30 years old, compared to is you started a policy as a 50 year old.
From our viewpoint, why not have a combination of group life insurance, and an individual life insurance policy? This would allow you to take advantage of your employers policy, in combination of you owning a separate policy, that you CONTROL. If changes in the workplace occur in the future, you have a policy in place. Your individual policy travels with you, and perhaps if you have a permanent life insurance plan, you have a policy guaranteed to pay out at time of your death.
Having life insurance policies that you are in control of could be a very important decision to you and your family. Policies outside of the work place provide “living benefit” riders that allow you to use part of your death benefit, while living, if you suffered a severe medical issue. You have also probably heard of the term ‘ don’t put all your eggs in one basket’. If you have heard of this, this applies to your life insurance needs as well.
Don’t let the process of obtaining diabetic life insurance be difficult. We are here to help you and your family. Contact us today, and let us work with you to find you the best priced policies possible. Everyday we are helping the Diabetes community, with their life insurance needs. Come experience the first class customer service we provide our clients every day!
