Many people assume their employer's life insurance is sufficient, but let’s take a closer look. For someone earning $70,000, typical group coverage at 2x salary means a $140,000 benefit. With today’s funeral costs, a few bills, and ongoing mortgage payments, that amount can disappear faster than most realize. The bigger concern is income replacement—those funds are meant to help your family for years, not just months. Industry guidelines generally recommend coverage of 10-12x your income to address debts, childcare, and lost earning power over time.
It’s also important to remember that employer-provided coverage is tied to your job. If you change employers, face a layoff, or retire, that protection may vanish—and obtaining new coverage later can be more expensive or sometimes even impossible. Supplemental life insurance through work often shares this portability issue, plus rates tend to climb sharply every five years.
As an insurance broker here in Austin, I often advise clients to consider locking in individual term coverage early. For example, a healthy 30-year-old can secure $500,000 of 20-year term for about $25–$30 monthly. To figure out your gap, subtract your employer’s coverage from that 10-12x income recommendation. Taking these steps can offer real peace of mind and lasting financial security for your loved ones.
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