Workplace life insurance is generally insufficient for most people’s needs – particularly income earners with families. Here’s a list of reasons why:

• Work life insurance has a fixed coverage amount which is generally too small. If your workplace coverage provides for $50,000 of life insurance, you get $50,000. Regardless of whether you should have $50,000, $100,000 or $500,000 of life insurance. You shouldn’t simply accept the amount provided by your workplace as ‘sufficient’ because it wasn’t chosen to be sufficient. Instead, you should have your broker do a full ‘needs analysis’ to determine the actual coverage amount that you need.
• You lose your life insurance if you move jobs. Your need for life insurance has nothing to do with who your employer is, but your work life insurance forces that to be the case. If you move jobs or are downsized, you lose your coverage. And this can happen at some very inappropriate times – like when you’re older and insurance is more expensive, or you become uninsurable. So you can lose your coverage as the result of your workplace, and be unable to replace it with individual coverage. If you have individual coverage, your workplace (or lack thereof) doesn’t affect the coverage.Now, workplace insurance does allow you to exchange it for an individual policy in the event that this happens – but you have only 30 days to make this change; and generally neither your employer nor the insurance company will remind you or even tell you that this option exists. And if you do choose this option, the available life insurance policies are generally unattractive. 
• It’s not guaranteed. Your workplace life insurance is based on your employer continuing to provide benefits, and specifically a life insurance benefit. None of this is likely guaranteed – so if your employer changes plans or simply removes the benefits, you have no recourse.
• Pricing isn’t guaranteed. Work life insurance is repriced every year. So if it’s $50/month this year, there’s absolutely no saying what it will be next year. It’s ‘probably’ $50/month next year as well......but again, it’s not guaranteed. It could be anything.
• Pricing increases, generally every 5 years. Workplace life insurance charges based on age ‘bands’, so it’ll be the same price ages 35-39, then the same price ages 40-44, and so on. If you start work right at the beginning of an age band, best case scenario, your premiums will increase every five years. By contrast, an individual term life insurance policy can lock in and guarantee your premiums for as long as 30 years. 
• Premiums are based on averages, not your individual health. Workplace life insurance is priced on averages – so it includes people who may be less insurable than you. Further, except for very large employers, it’s priced on averages across a large ‘general population’. Most individual life insurance policies involve a review of your medical history – ensuring that you get the least expensive premiums available for your health category.

 Workplace life insurance is a nice perk when it’s made available to you, but you should not count on it as comprehensive, full, or even sufficient coverage. Instead, you should investigate an individual life insurance policy which overcomes all of these deficiencies.