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Should You Buy Life Insurance at Work?

Aug 03, 2020 3 min read John Renz

Key takeaways

  • Know the types of life policies your employer offers
  • Group rates can make buying easy and affordable
  • Some employers offer "guaranteed" amounts without medical exams


If one of your goals is financial wellness for your family, life insurance may be a wise investment. Depending on your needs and coverage amount, the death benefit from life insurance can help pay for your debts and final expenses so your loved ones don’t have to. Or, it can pay for things like a mortgage, day care or even college education- if you’re no longer there to do it.

Typically, people have viewed buying life insurance a bit like visiting the dentist. But getting coverage through your employer can offer several advantages over purchasing it on your own. For one thing, many employers automatically provide some life insurance coverage to employees (typically one year’s salary) as part of their benefits. Moreover:



It can be more affordable

In general, you can choose from two kinds of life insurance:

  • Universal

    (a type of “permanent” insurance), which can be pricey but lasts your entire life as long as your premiums are paid, and could offer other benefits
  • Term,

    which you buy for specific periods or “terms”

Most life insurance available through employers is term, which tends to be more affordable than universal. What’s more, because you’re buying it through your employer, you’ll take advantage of group rates, which are often lower than if you purchased a policy on your own.


It can be easy to buy

Often, you can purchase some “guaranteed” amounts of life insurance without having to answer medical questions or take a medical exam. And if you choose to buy more, the insurance company may visit your home or workplace for the exam, to make it easy for you.

Here are three questions to ask yourself before you buy life insurance through your employer:

  • Can I take it with me if I leave?

    Some policies offer “port” (portable) or “conversion” features that let you transfer the policy to your name for the remainder of the term, or convert it to an individual policy. If your employer is your only option for life insurance, this can be an important consideration.
  • How much do I need?

    Your coverage needs depend on your situation. If you’re single and have few financial obligations, you may only need enough to handle your final expenses. If you have a family, you may want to think about their long-term financial needs and consider a larger amount. This calculator can help you figure that out.
  • What if I need more insurance than my employer offers?

    If you need more coverage, consider buying another policy elsewhere to bridge the gap. You can find affordable options through professional associations, unions or membership programs (where you may be able to snag term insurance at discounted group rates) or, of course, Prudential.


What you can do next

Life insurance is important for a healthy financial life. And while no one looks forward to buying it, contact your benefits department to learn what may be available to you through your employer. You might find buying coverage is easier and more affordable than you thought.



John Renz is a creative director at Prudential.


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