Additional coverage to enhance peace of mind
Supplementary Group Life Insurance is an optional benefit that allows employees to purchase additional life insurance coverage on top of their employer-provided basic group term life policy. This add-on offers employees the flexibility to tailor their life insurance protection to better meet their family’s financial needs.
What is Supplementary Group Life Insurance?
While many employers offer a basic amount of life insurance at no cost to employees, it’s often not enough to fully support a family in the event of a loss. Supplementary Group Life Insurance allows employees to increase their coverage amount—typically at affordable group rates—and provides the opportunity to extend coverage to spouses and dependent children as well.
This coverage is usually paid for by the employee through payroll deductions and is offered at a lower cost than many individual life insurance policies.
Key features
- Employee-paid coverage: Supplementary life insurance is voluntary and paid for by the employee.
- Customizable amounts: Employees can often choose coverage in increments (e.g., $10,000, $25,000, or multiples of salary) up to a specified maximum.
- Spouse and child coverage: Many plans allow employees to purchase additional coverage for their spouse and children at competitive group rates.
- Portability: Some plans offer the option to take the policy with you if you leave your employer, either by converting it to an individual policy or continuing it through direct billing.
- Evidence of insurability: Coverage amounts above a certain threshold may require answering health questions or undergoing a medical exam.
Why employees choose supplementary coverage
- Fill the gap: Employer-paid life insurance is often limited. Supplementary coverage helps bridge the gap between what’s provided and what’s needed.
- Affordable premiums: Group rates are often more economical than purchasing individual life insurance.
- Convenience: Easy enrollment through work and premiums deducted directly from paychecks.
- Family protection: Ability to extend life insurance to loved ones under the same plan.
Things to consider
- Coverage limits: There are often maximum limits on how much supplemental coverage an employee can elect.
- Health questions: Higher coverage amounts may require medical underwriting, especially if enrolling after the initial eligibility period.
- Job-based: Coverage typically ends when employment ends, unless portability or conversion options are used.