Downside of employer life insurance?

[hbomdiggity]

DH currently has LI through his employer for $320k. He pays 12/mo.

I just got approval for a private policy for $1mil. It comes out to 55/mo.

He thinks he should just add more to his work policy. I said you all frown upon that. I need to know why.

[Deleted]

if you leave your job (voluntarily or forced) you lose coverage. If you are out of work due to illness for a long time, you could lose coverage. The longer you wait to get a private policy, the higher the cost and the chance that you could not get coverage due to an illness or diagnosis. need more?

[noodleoo]

If he leaves the company for any reason, that policy will be canceled immediately. If he has any health issues between now and then, they may render him uninsurable at that time. You are better off locking in a private policy now while he is in good health that can never be canceled against your choice.

[raangoli]

Nov 27, 2012 17:12:57 GMT -5 flygirl said:

if you leave your job (voluntarily or forced) you lose coverage. If you are out of work due to illness for a long time, you could lose coverage. The longer you wait to get a private policy, the higher the cost and the chance that you could not get coverage due to an illness or diagnosis. need more?

This is what I was going to say.

[hbomdiggity]

This is the optional insurance through his employer, which is in addition to the basic coverage (100%paid by employer).

The basic coverage (3x salary) terminates if he leaves. He can take the optional coverage with him.

[hbomdiggity]

It looks like you can convert the entire policy, but I guess cost is the big unknown.