Domonique Rodgers of NC State is an experienced insurance agent and advisor. In the following article, Domonique Rodgers discusses supplemental life insurance, if its necessary, and who might benefit from a secondary source of insurance.
What happens when the wage earner of the entire household suddenly passes away? Unfortunately, it can mean that expenses and debts fall to family members and loved ones. However, this financial hardship can be avoided with the proper use of supplemental life insurance policies. Domonique Rodgers of NC State says that he is often asked the question of whether obtaining a supplemental policy is worth the expense.
Supplemental life insurance is a policy of coverage that is optional, allowing for protection on top of an existing policy that may be provided by an employer. An individual should obtain supplemental life insurance if they would like the benefit of simple payments, and their family requires more coverage than what is offered in an employee benefit package.
In this article, Domonique Rodgers of NC State covers what supplemental life insurance actually is as a policy, what makes it important and potentially necessary, as well as an overview of what people may need a supplemental life insurance policy for.
Supplemental Life Insurance
Supplemental life insurance is a type of policy that can be layered over an existing form of life insurance coverage provided by an employer to an eligible employee.
This is important because over half of laborers, be they in the private industry or working for the government and state, are offered life insurance through their place of work. Domonique Rodgers of NC State explains that, sometimes, this is enough coverage for an individual, as it is low in cost and takes little effort to obtain by way of medical underwriting or medical examinations.
Unfortunately, the coverage provided by life insurance to employees is usually quite limited. For example, the benefit awarded to the policyholder’s account after death is based entirely on the salary earned at that place of employment.
Domonique Rodgers of NC State notes that, for this reason, many families find that the coverage employers provide is simply not enough for their financial needs. This is why supplemental life insurance is considered valuable, because it works as a safety net for families who need more coverage.
Typically, supplemental life insurance can fill in the coverage gaps left by employer policies, and it provides protection in the form of higher amounts than an annual salary, making it difficult to pass up for a family that needs more coverage.
The employee benefit package given by an employer will outline what kinds of benefits a person is eligible for, which they must then pay for out of their own pockets.
One example of this would be if an employer offers life insurance that is equal to a single year’s worth of salary, then offers a supplemental option that includes a death benefit that far surpasses just one year of salary. The difference in cost would be up to the employee and family.
Who Finds Supplemental Life Insurance Necessary
Domonique Rodgers of NC State states that not everyone actually need supplemental life insurance. Some policies offered as part of a benefits package does just fine in providing ample coverage for individuals. However, what makes supplemental life insurance so necessary for others is dependent on the following circumstances:
- A policyholder’s assets and savings, when added together, would not be enough to cover the expenses of dependents like children or spouses in the event of untimely death.
- The family would not be able to support the costs of funeral arrangements in the event of untimely death.
Additionally, even if these important scenarios are not necessarily the same as one’s own circumstances, they may find the benefits that come from using supplemental life insurance too useful to pass up anyway.
For example, Domonique says that, in most cases, supplemental life insurance is often very affordable. It is typically cheaper than individual life insurance packages because, by its very nature, it is only filling in coverage holes left by the employee benefits package.
Also, medical examinations, which are sometimes required for larger or individual life insurance policies, are generally not required in most forms of supplemental life insurance policies.
Finally, those who purchase supplemental plans can actually just deduct their payments each month from payroll at their job, making it much simpler to manage the policy.
In conclusion, Domonique Rodgers of NC State maintains that supplemental life insurance policies are useful offerings, typically given by employers, meant to cover areas that the employee benefits package life insurance does not. It can even be essential for those who have families or dependents that require more coverage than just one year’s salary’s worth.