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Supplemental life insurance may cover things like burial costs.
When it comes to different types of insurance, of which there are many, you likely already know the importance of things like health, car, and homeowner's insurance.
In general, these insurance policies act as protection should anything happen in those particular areas of your life. They provide financial support - and therefore emotional support as well, to some extent - against the ups and downs that life may throw your way.
One additional type of insurance that you might not have considered, but that could be worth looking into, is supplemental life insurance. Depending on where you work, your employer may offer this type of insurance for free, or at least at a low cost. It is also available through private companies for purchase.
Before looking into either option, it helps to know more about what supplemental life insurance is, and why you might even want it in the first place.
What is supplemental life insurance?
Supplemental life insurance is a life insurance policy that can be purchased in addition to a traditional life insurance policy. It's a way to expand your existing life insurance coverage if it's insufficient to cover your family's financial needs in the event of your death.
You may see supplemental life insurance coverage offered for things like burial costs or accidental death and dismemberment, or expressed as an additional coverage amount.
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If you are on staff with a company, your employer may offer supplemental life insurance as part of its overall benefits package. Check in with your HR representative to learn more about the specific policy offered by your company.
Be sure to ask what exactly is covered, and how it's covered - in other words, does this policy only kick in after your benefits from other policies have been used - as well as how much it costs. In some cases, employers offer this for free or very low cost. If that's the case, it might not hurt to sign up for it.
Having said that, it's likely that you already have a level of coverage through policies you currently own, like your health insurance, life insurance, or others. Before deciding whether or not to apply for supplemental life insurance, check your existing policies to see exactly what is covered, how much you're paying, and how the payouts work.
Why you might want to buy your own supplemental life insurance
Whether or not your employer offers supplemental life insurance, it's worth looking into private options as well.
What you end up paying for a private carrier will depend on some additional factors - such as your age and any pre-existing health conditions you have - but private options could provide a broader range of coverage than your employer's plan does.
Plus, you can take a private plan with you from job to job, while an employer-sponsored plan is only good for as long as you work for that company. If you're young and healthy now but change jobs in a decade, the cost to purchase your own supplemental life insurance policy down the road could be far higher.
If you already have a life insurance policy through another carrier, you may be able to add private supplemental coverage to your existing policy for a lower cost.
The bottom line
Just as it's important to understand what supplemental life insurance is, it's equally as important to understand what it is not: A supplemental life insurance policy should never take the place of a solid life insurance policy, whether that's a term or whole life policy.
Before signing up for supplemental life insurance, it's worth considering an increase in coverage through your primary life insurance provider. If you don't already have a good term or whole life policy, that's where you'll start.
A good life insurance policy offers much more coverage than a supplemental policy does, especially if you have a family, and the earlier and healthier you are when you get a policy, the lower your monthly premiums are likely to be.
Find out how much life insurance will cost you with a quote from Policygenius »
Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.
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