EMPLOYER PROVIDED INSURANCE

How many times have you or someone you know uttered the phrase, "I've got life insurance at work." Usually, you say this in an attempt to get rid of that pesky insurance salesperson.

Unfortunately, for far too many people, the only life insurance they have is through their employer. If you think this is a wise decision, just ask the many Sears retirees who were promised lifetime coverage and have seen their benefit slashed dramatically. Or the old Wisconsin Steel workers who watched their benefits disappear with the mill.

I have developed benefit plans for many companies over the years and 99 times out of 100 the company would reduce benefits or pass on higher premium costs to save the company money. It's nothing personal, it's just good business considering that all employee benefits cost your employer close to 40% of payroll.

Most employers use a group term plan to provide your life insurance coverage at work. The majority of plans provide either a specified death benefit or 1 to 2 times your annual salary. The death benefit reduces by 50% at age 65 and usually disappears at age 70. (These figures can and do differ from company to company). Of course, if you are caught in a downsizing or rightsizing or just plain old fired, your life insurance benefit is gone, just like your job.

The answer is to take advantage of the benefits offered by your employer, but make sure you purchase your own life insurance coverage. One to two times your annual salary is not enough of a death benefit to provide for your family. Contact your favorite PRCUA deputy for information on how much life insurance you need and how affordable it can be. Do not shortchange your family or yourself.

One last tidbit on employee benefits. If your employer has a 401K make sure you participate but if your monies are invested solely in your employers stock, watch out! If the company stock price goes down, so do you.