Supplemental life insurance is a type of coverage you can purchase in addition to a whole or term life insurance policy. If you’re a full-time employee, your company may offer supplemental life insurance for free or a very low cost. It may cover things such as burial costs or accidental death and dismemberment. Nut that’s just the basics. There are many other reasons you may want to, or actually have to get supplemental life insurance. This policy could be temporary, or permanent.
Reasons For Supplemental Life Insurance
The basics we already named. However, you must always remember that life’s circumstances change. And so does your need for coverage. This is why you should periodically review your financial situation with your adviser, or insurance broker. Life insurance coverage should be calculated to supplement twenty years of income. If you get a raise at work, you should also raise your total coverage. We discussed the topic of calculating your coverage needs here.
Another reason could be if you take out a major loan or a mortgage. This would cut down the time your coverage will last for your loved ones should you pass away. This type of situation is a typical need for temporary insurance, because you are expected to repay your loan. Once repaid, your need disappears.
As a Bonus From Employer
You may also receive a policy from your employer in the form of an executive bonus called SERP (Supplemental Executive Retirement Plan). We will discuss this in our next article. In general though, it is a bonus, which employers can opt into in order to show their appreciation for your services. It is a mutually beneficial long term bonus package
If you’re in a situation, where you feel you need extra coverage, we’re here to listen to you and give you some personal suggestions. To start a conversation simply fill out the form on our website for a free personal quote and we’ll get back to you shortly.