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What is supplemental life insurance?

You may be offered supplemental life insurance by your employer. Wonder if it’s a good deal? We have the answers.

Supplemental life insurance is coverage you can purchase from your employer in addition to the group life insurance they already offer.

It’s usually paid for out of your paycheck, like group life insurance. While group life insurance is part of your benefits package from your employer and therefore usually affordable, that’s not necessarily true of supplemental life insurance. Whether it represents good value depends on who you are.

Is supplemental life insurance right for you?

To put it simply, if you’re young and healthy, supplemental life insurance premiums may be higher than what you’d pay for the same coverage on the open market.

The reason is that when a life insurance company offers someone supplemental life insurance, they usually know less about that person than a typical insurer would. That’s because they may not ask health-related questions in the application, or fewer of them than they would if you were to apply for an individual policy. Therefore they charge higher prices for supplemental life insurance across the board to cover themselves for that risk.

If you’re young and healthy, a life insurance policy issued by an insurer that doesn’t know a lot about its customers’ health situations probably does not benefit you. Broadly speaking, the younger and healthier you are, the less you will pay for life insurance. Let’s say you’re in your 30s and in good health: you want the insurance company to know about you in detail because it will lower the price you pay. A 35-year-old man in excellent health could get a 20-year, $500,000 term life insurance policy from Haven Life for as little as $24 per month, for example, and that’s because he’s a good bet: the insurance company looks at his stats, sees he’s unlikely to die while he’s covered, and charges him an affordable amount.

Who supplemental life insurance can help

Supplemental life insurance is most useful for people who might have difficulty getting coverage on the open market, or might find it prohibitively expensive.

Let’s say you’re older, have spent 20 years smoking like a character from Mad Men and like to hang glide on your weekends. A life insurance company will consider the probability of all those factors leading to your imminent demise and price your coverage accordingly.

If that sounds like you, supplemental life insurance, which comes from a company that knows less about your particulars, may be good value.

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What to check if you buy supplemental life insurance

One more thing about supplemental life insurance: If you decide to purchase it, be sure to check whether you can take the policy with you if you leave or lose your job.

That’s not always an option, so if you want life insurance in place for a particular amount of time (until your children are grown, perhaps; or until your mortgage is paid off), irrespective of your employment situation, it’s something to consider. On the other hand, if you buy your own term life insurance policy, it goes where you go, and keeps protecting your family even if you change employers (and continue to pay the premiums).

If you’re young and healthy, term life insurance policy is likely to be an affordable way to protect your family. To find out how affordable, use the life insurance calculator at Haven Life.

Life insurance is more affordable than you think

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Michael Davis is a freelance writer and editor who has covered everything from fashion and music to parenting, work, and finance. He has been a chef, restaurateur and record label owner.

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Our editorial policy

Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our editorial policy

Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.

Haven Life is not authorized to give tax, legal or investment advice. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Individuals are encouraged to seed advice from their own tax or legal counsel.

Our disclosures

Haven Term is a Term Life Insurance Policy (DTC and ICC17DTC in certain states, including NC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Haven Term Simplified is a Simplified Issue Term Life Insurance Policy (ICC19PCM-SI 0819 in certain states, including NC) issued by the C.M. Life Insurance Company, Enfield, CT 06082. Policy and rider form numbers and features may vary by state and may not be available in all states. Our Agency license number in California is OK71922 and in Arkansas 100139527.

MassMutual is rated by A.M. Best Company as A++ (Superior; Top category of 15). The rating is as of Aril 1, 2020 and is subject to change. MassMutual has received different ratings from other rating agencies.

Haven Life Plus (Plus) is the marketing name for the Plus rider, which is included as part of the Haven Term policy and offers access to additional services and benefits at no cost or at a discount. The rider is not available in every state and is subject to change at any time. Neither Haven Life nor MassMutual are responsible for the provision of the benefits and services made accessible under the Plus Rider, which are provided by third party vendors (partners). For more information about Haven Life Plus, please visit: https://havenlife.com/plus.html

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