Bethesda, MD (PressExposure) December 04, 2009 -- With unemployment reaching a 26-year high last month, the old ways of maintaining Life insurance and Disability insurance coverage through an employer-sponsored group plan may be over.
"People like taking advantage of the benefits offered at work for many reasons", says Michael Relvas of MR Insurance Consultants, a web-based insurance firm specializing in Life insurance and Disability insurance. "Group plans provide people with: easy access, payroll deduction options and a low cost of coverage. But, what they don't realize is that these plans provide very limited to no portability."
This dependency is becoming a growing concern because when a person loses or changes his/her job, the group coverage will either be too expensive or unavailable to take with him/her. Being that unemployment reached 10.2% last month, relying on group coverage to fill your Life and Disability insurance needs could prove costly and dangerous.
Disability Insurance One of the biggest concerns specifically related to group Long-Term Disability insurance is its lack of portability. This means when you change or lose your job, your Disability insurance will not go with you, which in today's job market is a very important point to consider. Companies are still downsizing, positions are being terminated, and people are changing jobs. Additionally, many companies have had to cut parts of their benefit packages in order to help maintain profitability. So, although you may have strong job security or be able to find a new job quickly, the group benefits you currently have may not always be there, especially during times of transition.
We suggest that individuals consider obtaining a strong supplemental policy that includes the Future Increase policy rider. This is an optional rider that allows the policy owner to increase benefits at a later date, without having to undergo medical underwriting. Not only will this provide people with independence from their employer-sponsored plan, but it will also protect them from the risk of developing health problems that could cause them to become uninsurable - all at an affordable price. "Individually-owned Disability insurance continues to protect your income throughout your career, regardless of who you are working for", says Michael Relvas of MR Insurance Consultants. "It is the single best way to protect your quality of life, your loved ones, and your future by guaranteeing if an illness or injury prevents you from being able to work, you will still receive a paycheck."
Life Insurance Unlike group Disability insurance, group Life insurance does actually provide plan participants with portability. These options are very liberal and do not require medical underwriting, which can be great for someone who is otherwise uninsurable. For this reason however, the cost of continuing coverage is usually very expensive. Normally, these options will only be taken advantage of by people who are unable to obtain individual coverage.
Individual Term Life insurance is a great alternative to group Life insurance and creates additional independence from your work. It keeps cost low and alleviates the risk you run by only carrying group Life insurance. One can obtain a 10-year Term Life insurance policy, which guarantees premiums will remain level for 10 years (this is possibly longer than your group coverage remains level), at a very affordable cost. According to MRLifeInsuranceQuotes.com a 35-year old male in fairly good health can obtain a $250,000, 10-year Term policy for less than $15/month and less than $14/month for a female. A 45-year old male in fairly good health can obtain the same coverage for less than $25/month and less than $23/month for a female.
It is very clear that people want to try saving money these days, but we can't forget about the responsibility we have to our families and loved ones. Rather than not obtaining individual coverage at all, in these difficult times, people should just downgrade a bit and look at 10 or 15-year Term policies instead of 20 or 30-year policies. You can obtain quality protection without having to drain your wallet - you just have to find a financial professional who is truly willing to help YOU!