What Does Supplemental Life Insurance Cover? 4 Important Facts You Should Know!

Are you considering a particular type of insurance and wonder what does supplemental life insurance cover? The coverage of supplemental life insurance is similar to the scope of a standard life insurance policy. It helps cover the additional expenses and financial needs when the traditional life insurance is not enough to protect the whole finances.

As the name suggests, supplemental life insurance is somewhat like an additional coverage amount for basic life insurance. To fully understand life insurance coverage, it is necessary to learn what supplemental life insurance is first.

what does supplemental life insurance cover

One type of life insurance that clients sometimes purchase in addition to their life insurance policy is supplemental life insurance. Sometimes, if you work in a company, your employer might provide you a life insurance policy. The employer may also offer you supplemental life insurance, in some cases, to purchase for additional coverage whenever something happens. Read on as we discuss some facts you need to consider on the supplemental life insurance coverage.


Facts About Supplemental Life Insurance Coverage

It is a great benefit if your employer has provided you supplemental life insurance if you are an employee. A typical supplemental life insurance contract may cover a group of people, thus the reason why it is sometimes known as group life insurance. Also, when an insured person passes away, the beneficiaries receive the life insurance payment. With that, here are four facts to know more about what does supplemental life insurance coverage is.


Fact #1. Difference between a standard and supplemental life insurance

The coverage of supplemental life insurance dramatically differs from the standard life insurance policy. In standard life insurance, the beneficiaries receive your insurance benefits at no cost to you; however, the coverage of the premiums is limited. Additionally, your employer usually offers this type of life insurance at standard rates without any additional charges.

On the other hand, supplemental life insurance is additional coverage that you can purchase and your standard life insurance policy. When you think that the traditional life insurance coverage is insufficient for all of the financial needs of your beneficiaries, then supplemental life insurance is a massive help for additional benefits.

With that being said, it is essential to consider how much and for how long would the coverage you need to choose the right type of life insurance.


Fact #2. Insufficient coverage of standard life insurance policy

As mentioned previously, supplemental life insurance provides you additional coverage if your standard life insurance is insufficient. Because the benefits stated on your insurance policy may not be enough for your beneficiaries, considering purchasing supplemental life insurance is a good choice. You can buy it yourself, or the employer may provide you with no cost by including it in your comprehensive employee benefits package.


Fact #3. Inclusions in the insurance policy

If you own an insurance policy, you must learn and fully understand the contract. For example, when your employer offers supplemental life insurance, it is usually an accidental death and dismemberment insurance policy. Sometimes, you may realize that your employer has given you a type of burial insurance policy.

An accidental death and dismemberment insurance policy pay your beneficiaries when you pass away; however, it only applies if your death is an accident. The beneficiaries will also receive payments from your insurance company if you got dismembered, such as a limb, eyesight, or anything caused by accident. Even if this kind of insurance policy varies for every insurer, the payouts are usually given to a dismembered individual.

On the other hand, a burial insurance coverage may be too low, which usually ranges from $5,000 to $10,000, depending on your insurance policy provided by your employer. As the name of this type of insurance suggests, this policy offers help for the burial expenses. It gives additional financial support to the standard life insurance coverage whenever it is sufficient for the bereaved family.


Fact #4. Insurance portability

Are you planning to work for the same employer for a long time? Well, if you answered yes, you do not have to worry about the portability of your insurance policy. However, if you answered no, then you might need to consider some things. When you transfer to another company, there may be a chance that your insurance policy will be terminated, mainly if your employer-provided it.

Even if you were let go by your employer, the same thing would happen. It may seem unnecessary; however, it gets complicated when you get a new insurance policy. You may not find any affordable policy or pass the life insurance exam if some factors, such as your health condition, changed on your old contract.


Final Words

And those are the four facts you need to know on what does supplemental life insurance coverage is. Of course, the scope of your insurance may vary depending on what type your employer-provided to you or what kind you purchased.

Whatever it may be, you should consider some factors to learn more about supplemental life insurance policy and its coverage. If you liked reading this article, you might want to check out these awesome tips on how to save money on life insurance!

Leave a Comment