The Changing Employment Landscape and the Need for Personal Life Insurance Coverage

Life insurance is a crucial consideration for anyone who wants to provide for their loved ones in the event of their death. While many employers offer group term life insurance as part of their employee benefits package, owning your own life insurance policy outside of your employer's coverage is crucial for several reasons.

One of the main benefits of owning your own life insurance policy is portability. When you have a policy that's separate from your employer's coverage, you're not tied to that employer. The changing landscape of employment makes it more important than ever to own your own life insurance policy. This means that if you leave your job or switch to a company that doesn't offer life insurance, you'll still have coverage in place. Owning your own policy can provide a sense of stability and security in an uncertain job market. In the past, people often worked for one company for their entire career and depended on their employer's benefits package, including life insurance. However, in today's job market, it's becoming more common for people to switch jobs frequently or even work in the gig economy without access to traditional employee benefits. Owning your own policy also provides for customization, giving you the ability to choose the amount of coverage you need, the duration of the policy, and any additional riders or benefits you want to include. 

Life insurance policies also have some tax advantages that you may not get with your employer's coverage. For example, the death benefit is usually tax-free to your beneficiaries. Additionally, some types of policies allow you to accumulate cash value on a tax-deferred basis, which can be a valuable asset for your future.

Convertibility by owning your own individual policy can also be a valuable feature for individuals who purchase term life insurance when they're young and healthy but later develop health issues that make it difficult or impossible to qualify for a new policy. By converting their term policy into a permanent policy, they can ensure that they have coverage in place for the rest of their life, even if their health deteriorates.

Another crucial benefit of owning your own life insurance policy is that it can be more cost-effective, especially if you're healthy. When you purchase a life insurance policy through your employer, the premiums are spread out across the entire group, regardless of individual health status. This can result in higher premiums for those who are healthy, as they are essentially subsidizing the cost for those who are less healthy. However, when you purchase your own life insurance policy, the premiums are based on your individual health status and lifestyle factors. This flexibility allows you to shop around and compare rates from multiple insurance companies to find the most affordable option for you.

The information provided is general and educational in nature and should not be construed as personalized investment, tax, or insurance advice. You should consult with your own tax or insurance advisor regarding your personal situation. The statements contained herein are based solely upon the opinions of Telemus Capital, LLC. All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice. Information was obtained from third party sources, which we believe to be reliable, however Telemus Capital cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. Insurance and investment decisions should always be made based on the client’s specific financial needs, goals and objectives, time horizon and risk tolerance. Current and future portfolio holdings are subject to risk. Risks may include interest-rate risk, market risk, inflation risk, deflation risk, currency risk, reinvestment risk, business risk, liquidity risk, financial risk and cybersecurity risk. These risks are more fully described in Telemus Capital’s Firm Brochure (Part 2A of Form ADV), which is available upon request. Telemus Capital does not guarantee the results of any investments. Investment, insurance and annuity products are not FDIC insured, are not bank guaranteed, and may lose value. Advisory and Insurance services are only offered to clients or prospective clients where Telemus Capital and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Telemus Capital unless a client service agreement is in place.