You may hear the term basic life insurance from time to time. What does that mean? Life insurance is quite complex. There are numerous forms of it. That is what makes it so versatile. In most cases, there is a policy to fit your needs and your goals. However, basic life insurance might be just the ticket. It is a standard policy. Though there are differences from one insurer to the next, this is a common form of protection. Here’s what you should know about it and how it works.
Most Workplace Policies Are Basic
Many employers provide life insurance to their employees. This may be a type of benefit the company offers. While employers can choose any type of life insurance to offer, most offer a basic life insurance policy. Again, the details can differ, but you can expect most forms of coverage like this to offer features.
The most common feature is the death benefit. This is a payment made at the time of the covered individual’s death as long as the policy remains active at that time. The funds go to the named beneficiary. The value of the death benefit can change depending on the plan. Most will offer between $10,000 and $100,000 in coverage.
Why This May Not Be Enough
Basic life insurance does not offer any additional benefits. It might only pay the death benefit. In most cases, it may not provide enough coverage for some people. Additionally, most of these types of coverage remain in place for only a short term. Once that term expires, the coverage may no longer apply. In the case of employer-provided coverage, it remains in place as long as you continue to work for the company. Usually, you can't take it with you when you change jobs.
It is important to consider other options. You can purchase additional life insurance on top of this basic coverage if you desire options such as:
- A larger death benefit
- A longer term
- Income-earning ability from your policy
- Whole-life coverage
- Retirement planning funding
The key here is to realize a basic life insurance policy is just that. It provides a basic level of protection to you. Still, while this might be comforting, it might not be ample for you, either. Do not automatically believe that the policy your employer offers is enough to meet all your goals and needs. Instead, work with your Oklahoma life insurance agent. Improve your coverage to get more protection in place.