How to choose your 2009 employee benefits: Part 5

What are the signs of autumn? Falling leaves, frosty mornings, and Open Enrollment. In this multi-part series, we'll help you sift through the choices among your employee benefits.

Part 5: Life insurance

Your employer may offer some free life insurance as well as the opportunity to buy more coverage through a group plan. Assuming you think you need more insurance than your employer is paying for, should you opt for the group plan?

If you have health problems, use the group plan. It will have limited, if any, screening for medical conditions. You might not be able to get outside coverage or it might be too costly.

"Healthy employees may do better passing up life insurance offered by their employers," says Kathy Longo, a principal at Accredited Investors, a financial planning firm in Edina, Minn. "Group life insurance lumps everyone in one category to cover both the healthy and nonhealthy." Also, individual policies may have premiums that are guaranteed for up to 20 years, while group premiums rise as you get older.

Advisers warn against having employer-provided insurance serve as your basic policy for family protection. "If a group policy can't be converted to individual coverage when you leave the company, it could be disastrous, especially if you have medical issues," says Ginny Stanley, a principal at REDW Stanley Financial Advisors in Albuquerque.

Instead, your group life insurance might be used to provide coverage for purposes such as making sure your college-age kids can finish their education.

For more tips on buying life insurance on your own, check out this article from the Consumer Reports Money Adviser.

Comments

[Futuregenerali]

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