My employer offers life insurance through our benefits plan at a discounted rate. However it's only a $25,000 coverage. I'm married and have 2 small children. Would it be better to purchase additional coverage through the same company or to use a different company that has a slightly better rate for my full life insurance needs?
I recommend that you obtain multiple quotes for term life from a reputable broker who specializes in term life policies. I can give you several referrals if you contact me privately. Compare coverage terms and cost to your group life policy. Depending on your age and health, individual term life is likely to be better value than a group policy, and it is portable in the event that you change jobs. Be sure to purchase from an A or A+ rated company (claims paying rating). I would not worry too much about diversifying credit risk across more than one company unless you are planning to purchase significant coverage (>$1mm). But if you are reluctant to have all of your eggs in one basket then identify the two or three best ones and split the policy limits accordingly. Try to find policies with guaranteed renewal options for 10, 15, or 20 years, especially if you are over age 35.
Lamar, You need to obtain more information. Find out what the rate per1000 is to increase the group life insurance. Also find out if it's portable should you leave the company ( Probably not.) From my experience, it almost always makes sense to purchase additional coverage - beyond what the company pays for - Privately ( assuming you are insurable). You can probably lock into a 20 year term policy with a guaranteed rate, and portable should you leave the company - for a very competitive rate. Best of luck, Evan
