Finance Article: What If Your Employer's Life Insurance Policy is Not Enough?

Although death is not a subject that most of us like to talk about, we all know that it is an inevitable part of life. None of us will live forever.

With that in mind, it is absolutely crucial to consider the well-being of the loved ones we leave behind.

In the past, many of us simply relied upon the life insurance coverage provided at work. Unfortunately, that isn't enough. During these tough economic times, some employers have reduced or eliminated the coverage.

We also lose the coverage when we stop working for the employer. Millions and millions of people who lost their jobs over the last couple of years no longer have life insurance protection for their families.

While some coverage is better than none, the health issues that come with older age can make it more difficult, and more expensive, to purchase life insurance later in life.

Let's look at some reasons we need life insurance coverage to protect our families.

Whether your family is a one- or two-income household, work is important. We know that the loss of our income will cause dramatic changes for those we leave behind. Many families will find it impossible to maintain anywhere near the same standard of living following our death.

Life insurance can serve as an income replacement benefit for our families. It can help our spouses to continue to keep up with the household expenses. Death takes an emotional toll on the entire family, and leaving an income stream can eliminate at least one source of stress.

While there are consequences, consider this thought. Can our family continue to maintain the mortgage payment without our income? Will our family have to move if we die unexpectedly?

Whether we leave a lump sum to pay off the mortgage or create a monthly income stream to supplement other income, life insurance can leave our families with a little peace of mind while they take time to work through the grieving process.

With the rising costs of higher education, and the reduced access to some financial assistance opportunities, it may be difficult for our spouses and children to manage college expenses alone. Life insurance does not have to fully fund college costs, but it can be an excellent supplement. For a small cost, we can positively impact our children's future and ensure our children a chance to thrive.

If it is within the budget, we can take it one step further and leave our children a lump sum of money to help them get on their feet in adulthood. They can use the money to pay off student loans, put a down payment on a home, or even help them start their own business.

We each have a set of values that we find important. Life insurance can help us leave a financial gift to a charitable organization.

We may find it difficult to set aside large sums of money in our regular budget for these groups. Life insurance allows us an affordable way to donate a sizable gift to a worthy cause.

Life insurance is too important to ignore. The benefits far outweigh the costs. Take some time to meet with your financial advisor to carefully evaluate your current policies to determine whether changes need to be made.

Ozeme J. Bonnette is a financial coach, speaker, and author of Get What Belongs to You: A Christian Guide to Managing Your Finances. After working for a top financial services company, she shifted her focus to speaking to groups hoping to increase financial literacy. She earned 3 Bachelor's degrees at Fresno State, and her MBA at UCLA's Anderson School. Her blog is

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Article Tags: life insurance, income replacement, estate planning

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