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June 20, 2022

What Is Supplemental Life Insurance?

Supplemental life insurance is a type of additional life insurance. This type of insurance policy is not meant to replace a solid term life insurance policy. However, supplemental life insurance will give your loved ones additional coverage in the event that you pass away. You can get supplemental life insurance privately or through your employer. Read this article to learn more about this type of insurance policy. 

What Is Employer-Provided Supplemental Life Insurance 

Many employers offer their employees term life insurance coverage as well as supplemental life insurance. In general, term life insurance provided by an employer works like traditional term life insurance. However, in many cases, employer-provided term life insurance is cheaper than regular term life insurance. The reason is that employer-provided term life insurance is a group policy. The company assumes less risk the more people it insures, leading to savings for employees. a group of people in a garden

Supplemental life insurance functions similarly. However, supplemental life insurance is typically cheaper than group term life insurance, but it tends to be more limited. The limits for supplemental life insurance will depend on the policy. Some key terms to be on the lookout for include: 

  • Accidental Death and Dismemberment: Certain supplemental policies are for accidental death and dismemberment. These policies will only cover you if you die due to an accident. Some of these policies will cover you if you are involved in a serious accident but don’t die. For example, if you lose a limb, hearing, or eyesight in an accident, you may be covered.
  • Burial Insurance: Some supplemental policies are intended to cover the cost of funeral and burial services if you suffer an untimely death. The policies often offer around $5,000 to $10,000 of coverage.
  • Non-Portable: A life insurance policy you buy through your employer could be non-portable. This means that you cannot take the life insurance policy with you when you retire or go to work for a different employer.

What Is Private Supplemental Life Insurance? 

Just like you can get supplemental life insurance from your employer, you can also purchase it on the private market. In this manner, it is similar to the process of purchasing private term life insurance. You can do some shopping to determine which insurance company provides the best deal for your needs. For more information about what is supplemental life insurance, don’t hesitate to contact us. 

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