Reasons to Buy Life Insurance Outside of Work

Reasons to Buy Life Insurance Outside of Work

Only a few people have life insurance, but however, everyone needs life insurance. Purchasing life insurance is one of the most rational decisions an individual can take, however, if you buy life insurance outside of work, you are even better off.

Life insurance describes an insurance contract /agreement between a policy owner and a life insurance company where the life insurance company will pay a stipulated amount of money to beneficiaries named by the insurance owner when such an insurance owner dies.

This money paid to be beneficiaries at the death of the insurance owner is in exchange for the premiums that have been paid by the insurance owner to the company during his lifetime.

Majorly, there are two types of life insurance policies, and these are permanent life insurance policies and term life insurance policies.

Term Life Insurance


Term life insurance policy as the name implies refers to a life insurance policy that is designed to last for a particular set term/time, that is a particular number of years. For instance, it may be for 10, years, 20 years, 30 years and so on. The policyholder chose when to take out the policy.

Term insurance policy packages offer the benefit of creating a balance between long-term financial strength and affordability. It may come in packages such as decreasing term, renewable term, and convertible term.

The coverage of a decreasing term life insurance decreases at a rate that is predetermined over the policy life, renewable term package is usually the cheapest and make provisions for a quote for the policy purchase year. However, the premium even though cheap at the beginning increases year by year.

On the other hand, the convertible term option gives allowance for the term life insurance package to be converted to a permanent life insurance policy package.

Permanent Life Insurance


A permanent life insurance policy on the other hand is a life insurance policy that remains in force for the entire life of the holder of the policy unless such holder surrenders the policy or stops the premium payment. This life insurance policy is more expensive than the term life insurance policy.

Life insurance like many other types of insurance can be purchased by individuals and organizations.

Many organizations offer free life insurance policy coverage for their workers. This example is rife in the United States of America, where research reveals that around 60% of workers working in non-government establishments have access to hold a life insurance policy through their work.

Life insurance policies obtained through work always come free of charge as the employee has no reason to pay for them. The organization foots the bill. Apart from the guarantee of coverage by the policy, the policy also does not require the worker concerned to submit him/herself to a medical exam.

Types of permanent life insurance policies include; Universal life insurance and whole life insurance.


Why You should Consider Buying Life Insurance Outside of Work

However, as good as the group life insurance policy at work sounds, it may just not be enough for you. It has its limitations and glitches.

If you are an individual that is relied upon by your kids, spouse, and perhaps some other family members, then you may just need, more than the life insurance policy at your work. You may need to purchase a life insurance policy for yourself individually, and here are good reasons to give this serious consideration.

  • Additional Terms and Conditions Cannot Be Added

If you rely on life insurance at work alone, you will not be able to add additional terms and conditions in the form of riders to the policy package.  These additional terms may be useful in the enhancement of specific situations for you, and why you can get to do this in a personal, out-of-work life insurance, you cannot get it in a work-life insurance.

The terms and conditions agreed with the insurance company by your employers for the group life insurance is all you will have. This is a good reason to explore life insurance outside of work.

  • Work Life Insurance May Not Offer Enough Coverage

Group life insurance packages are usually broad in characteristic, and therefore, the opportunity to customize the policy does not normally arise.

Data from the bureau of labour statistics indicates that the average worker has group life insurance coverage access of about 200,000 dollars, an amount even though can be described as reasonable, still fall short of what would be needed for someone with big future expenses, family, and debt, a death benefit beyond 200,000 dollars may be needed.

Staying underinsured is not an advisable risk you should take. Therefore, you should buy life insurance outside of work to stay well insured.

  • Life Assurance in Work are Hardly Permanent

If you are looking forward to getting a permanent life insurance policy plan, then life insurance outside of work would be a better choice for you. This is because life insurance policy covers at work mostly offers term insurance packages.

Term life assurance are normally recommended by financial experts due to its affordability and the fact that it serves as safety net while building savings.

  • It does Not Leave with You If You Leave the Job

Many of the available group life insurance policies does not include the portability feature when the policyholder leaves the job. The policy holder may be able to convert the life insurance policy package from a group to an individual one, but he will have to pay the same premium package that were previously covered by his employers.


Group life insurance can be quite attractive. That it comes with little or no cost, does not require medical exam or giving answers to questions about health makes it such an easy an attractive option.

However, group life insurance comes with its own limitations, pros and cons, which may make it not to be totally suitable for you. Life insurance outside of work may therefore be your smart choice.

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