Lenny, My coworker told me my life insurance from work isn't enough. Is it?

Your Life Insurance from Work is a Good Start. It's Not the Whole Answer.

A lot of people have life insurance from work and don't realize they need more. Employers provide it, and the government rewards it with tax incentives, because nobody wants an employee's family left stranded if a parent doesn't come home. It's good coverage, and you should buy as much of it as you can.

But it's only part of the answer. Here's what most people don't find out until it's too late:

• Your work policy usually ends the day the job does. Layoffs, career changes, even a move to a better job.
• Coverage can quietly lapse while you're on medical leave.
• Conversion to an individual policy is expensive, because the carrier has to take everyone, including the terminally ill.
• The amount is smaller than your family needs. Most group plans pay one or two times salary. Your family usually needs closer to ten.
• The spouse and child riders are token amounts, sized for a funeral rather than for replacing an income.

The My Job's Life Insurance Checklist walks you through every question to ask HR and the benefits administrator so you actually know what you have. When you're ready to see what private coverage looks like, get a quote in about five minutes, or schedule a call and we'll talk it through.

Below you'll find the detail: the three gaps, how conversion actually works, what happens on medical leave, real cases of coverage failing, and what to do this week.

When it is handled, a few specific things stay true.

Group coverage is the cheapest foundation you will ever buy, but it is only a foundation. Everything above is what the foundation is there to hold up.

I know this gap because I lived it.

I was forty two years old, I had work coverage from one employer that was expiring as I became an insurance agent. I tried to convert the coverage, and after 6 months of shuffling forms back and forth, I gave up.

I would submit a form with a payment, and then about a month later, I would get a check back in the mail with no further information. No contact phone number, no nothing. I would call the number I had, and nobody would know anything. I would then get a letter in the mail a few days later with an esoteric message, saying that something was missing from the form, or a line was filled out incorrectly. And then I would call back in, "Oh, we see they refunded you the money but there will be a letter arriving with the reason in 14 days." "I told you I got that letter and that was why I was calling." "Oh, just fill out the application and send it back with your form."

I gave up. Last year, as we left Indiana and I started this agency, it took 5 months to get the conversion taken care of for Sierra. Thankfully, after 3 years of trying to get coverage from several different companies for her due to medical conditions, we were able to get a policy just as that conversion was going to take effect. Substantially more coverage at a lower rate!

I've been through it myself. That's why I've written this page for you. So you will be better prepared than I was.

Lenny Burton, CLU®

Chartered Life Underwriter · NPN 19046937

Independent agent serving families across Florida, Ohio, and Indiana. Available by text, email, or scheduled call.

(772) 675-5433
ahoy@coveragecaptain.insure

• CLU designation. Chartered Life Underwriter is the highest academic credential in life insurance, held by fewer than 5% of agents in the country.
• Independent agent. I work for you, not any single carrier. I shop the whole market.
• Licensed in Florida, Ohio, and Indiana. Virtual meetings available in all three.
• I review every application personally. No call center, no script reader, no account handoff.

Three steps.

The next three things to do, in order. Each is small. Together they handle the job.

You'll find the detail behind those three steps below. If you want to understand exactly what your policy does and doesn't do before you talk to anyone (HR, a benefits administrator, or me), keep reading.

Seven terms that come up, in plain English.

If the HR packet used jargon and then kept going, you'll find plain English definitions here.

What group life insurance usually covers.

Every employer plan is a little different, and the Summary Plan Description is the last word on any given plan. That said, most group life policies in the United States look a lot like this:

• Base coverage is typically a multiple of your salary, often capped at a dollar amount. Read the Summary Plan Description to find your exact number.
• First $50,000 of employer paid coverage is tax free. Coverage above that amount is reported as imputed income on the W2, using IRS Table I rates.
• Optional supplemental coverage, paid by you. Usually payroll deducted, with a guaranteed issue amount up front and EOI required above it.
• Small spouse and child riders. Typically $10,000 to $25,000 for a spouse, $5,000 to $10,000 per child. Sized for final expense, not income replacement.
• AD&D as a separate line. Often bundled on one enrollment form, but mechanically a different product.

This is a real benefit. It is a better deal than paying nothing. It is also almost never the whole answer for your family if you have dependents.

Three gaps that surprise people.

1. The coverage amount.

Financial planners typically use ten to twelve times annual income as a starting point if you have kids and a mortgage. Group policies usually pay one or two times salary. The gap between those two numbers is what your family would have to close with savings, a different lifestyle, or a surviving spouse returning to work sooner than anyone would want.

2. The portability trap.

Most group life insurance ends on the last day of employment. Layoffs. Career changes. Early retirement. Even a welcome move to a better job. The day the paycheck stops, the policy usually stops with it. There is almost always a conversion option, but the price jumps because the employer subsidy is gone and the new premium reflects your real age and the fact that the carrier has to accept everyone who applies.

3. Spouse and child riders.

A lot of group plans include a small amount on your spouse and another small amount on each of your kids. The numbers are almost always sized for a funeral and a few weeks of breathing room, not for replacing a stay-at-home parent's contribution to your household or funding a college account.

Take every dollar your employer offers. Then keep reading.

If your employer offers life insurance, take every dollar of it. Max out the base benefit. Max out the voluntary buy up. Here is why.

• The employer pays most or all of the base premium. You've earned it. It is part of your compensation.
• Inside the guaranteed issue amount, everyone's accepted regardless of health. If you'd have a hard time qualifying on the open market, this is the whole ballgame.
• Usually you can buy a little more at a great rate. Take every dime they offer, and then let's talk about what comes after.

"I tell people the same thing every time. Buy as much Life Insurance as you can through work. You will not get those rates anywhere else. Then come see me, because on its own a work policy is not enough."
Lenny Burton, CLU

When group coverage really is enough.

Not everyone needs their own policy on top. For some people, the employer plan plus savings plus short term disability already covers the life you are actually living. Examples:

• You will absolutely never have any dependents or family members who rely on your income.
• No mortgage, or a paid off home.
• A healthy emergency fund and retirement balance.
• A short window between now and when the need disappears (kids grown, house paid off, retirement funded).
• Your parents and other family who would benefit from you being around are gone.

Who actually knows what the policy does.

HR is not the benefits administrator. HR handles enrollment, answers questions about deductions, and manages paperwork. The outside benefits administrator holds the actual policy language and decides claims. Two different phone calls.

Two more things worth confirming before assuming anything:

• Some employer coverage is accidental death only. It does not pay on illness. Most people don't realize this until it's too late. Read the Summary Plan Description, not the brochure.
• Not every group policy has a conversion option. Some do. Some do not. Some have portability but not conversion, or the reverse. That lives in the plan language.

Ask in writing, by email. The SPD is a document a benefits administrator is required to send on request.

How conversion actually works.

If your group policy has a conversion option and you leave the job, a short window usually opens, commonly thirty one days, to switch the coverage to an individual policy. A few things worth knowing:

• Thirty one days is a contract standard, not a federal law. The number lives in the group contract. Some contracts extend the window up to ninety one days if notice of conversion rights was delayed.
• Conversion is usually to an individual whole life policy, not term. That is specified in the contract. Whole life is structurally more expensive than term.
• No medical exam during the window. That is the whole point of conversion.
• Pricing reflects adverse selection. The carrier has to accept everyone who applies, including the terminally ill. Because the pool skews sick, the rate is usually higher than what you would pay on the open market.
• Thirty one day death benefit bridge. If you die during the conversion window, the group policy pays the death benefit up to the convertible amount, even if no application was filed.

Conversion is a safety net, not a value buy. If you are in good health, buying your own policy today is almost always cheaper, longer lasting, and priced for the health you have right now.

Buy private coverage now, or wait until leaving?

This is the question most people are really asking. There are two paths.

If you have dependents, Option A wins. Three reasons.

• Age goes up every year. Term pricing climbs with every birthday. A dollar of coverage is cheapest the day you are youngest and healthiest.
• Health rarely gets better. A diagnosis, a new prescription, a family history event that surfaces later. Any one of them can push a future application into a higher class or make it uninsurable.
• Conversion pricing is adverse selection priced. Waiting for conversion as Plan B means betting that the group contract gives a conversion option, that the notice arrives on time, that the thirty one day window is met, and that the conversion rate does not exceed what your own policy would have cost today.

Lenny's rule: Life insurance is one of those things in our lives that's best purchased when you don't need it. Because once you need coverage, you likely won't qualify or the cost will be prohibitive.

A forty year old, ninety thousand dollar salary, three kids at home.

Life insurance needs are personal. Press and hold any highlighted number to swap in your own situation, and the totals update as you type.

The two times salary group policy covers about eleven percent of what your family actually needs. That is not a failure of the benefit. It is the benefit doing its job as one layer of a plan that needs more than one layer.

How Much Do I Need?

Group coverage can lapse without you noticing.

Each of these is a real pattern, and each one has produced federal court cases where the employer or plan administrator was held liable.

Active work rules.

Most group contracts say coverage continues only while you are "actively at work." Unpaid leave, FMLA, ADA leave, reduced hours, or an extended workplace injury can quietly terminate coverage. You may only discover this after filing a claim, because the employer kept deducting premiums without updating the carrier.

Premium deducted but not remitted.

Payroll takes the premium out of your paycheck. The employer, acting as the plan fiduciary, is responsible for sending it to the carrier and filing the paperwork. When that breaks down, you are covered on paper and uninsured in practice. In 2024 the Department of Labor settled with a major carrier over this pattern [7] and required reprocessing of claims denied for lack of EOI after prolonged premium collection.

Supplemental coverage without Evidence of Insurability.

Above the guaranteed issue amount, most plans require a health questionnaire. If the employer accepts the extra premium without ever sending the form to the carrier, or does not follow up when it is incomplete, the excess coverage may not exist. In Van Loo v. Cajun Operating Co. [5], a federal appellate court awarded the family of a deceased employee $314,000 because the employer had collected premiums for six years without ever processing the EOI.

Conversion rights not communicated.

In Erwood v. WellStar Health System [6], an employee on FMLA for a terminal illness received an FMLA packet that omitted the conversion forms and the deadline. A federal court awarded her surviving family $750,000 under ERISA Section 502(a)(3).

None of this means HR is hiding anything. The machinery is complicated, the paperwork is easy to miss, and the liability sits with the plan fiduciary when it fails. Verify coverage in writing. Keep the Summary Plan Description. Do not assume "premium was deducted" equals "coverage is in force."

A few numbers worth knowing.

• U.S. life insurers paid $89 billion in death benefits in 2024 according to the American Council of Life Insurers [8]. The industry pays claims at scale every day.
• No regulator publishes a hard group life denial rate. Attorneys and consumer advocates estimate that ten to twenty percent of life claims experience an initial denial, extended investigation, or material delay. That figure is an estimate, not an official statistic.
• Ninety-five percent of workers with employer group life pay nothing for the base coverage [9]. That is why the first rule is still: take it.
• It only takes five minutes to find out how inexpensive life insurance can be.
  Why not find out now?
• ERISA gives at least one hundred eighty days to appeal a denied claim under 29 CFR 2560.503-1 [12]. Administrative exhaustion is required before a lawsuit.
• The Supreme Court in CIGNA v. Amara (2011) [13] confirmed that beneficiaries can recover under ERISA through surcharge, equitable estoppel, or reformation when a plan fiduciary breaches its duties.

Real stories from people who lived it.

A few posts pulled from public discussion forums. Each one is linked to the original thread and, where available, to an archived snapshot. Illustrations of the patterns and cases above, not testimonials.

Quoted for illustration. Individual anecdotes do not predict the outcome of any particular claim. Full citations and archive links on the sources page.

What to do this week.

Six things you can finish in one sitting. Print this or bookmark it.

• 1. Download your Summary Plan Description. Email HR and ask for the SPD for the group life plan. Save the PDF. Read the section titled "Loss of Coverage" or "When Coverage Ends."
• 2. Verify your beneficiary designation. Log in to your benefits portal. Confirm primary and contingent beneficiaries. If you are divorced, remarried, or have had a child since you enrolled, update it tonight.
• 3. Figure out how much life insurance you need. Plug your situation into the calculator and see where you stand.
• 4. Find out what your own policy would cost It only takes five minutes, and you'll probably be surprised! It's a real quote with no obligation.
• 5. Download My Job's Life Insurance Checklist. Every question to ask about life insurance at work, on one printable sheet. Free, no email required at askforlenny.com/work-life-worksheet. Print it and bring it with you to step 6.
• 6. Bring questions to your next benefits meeting. Confirm whether the policy is convertible, portable, or accidental death only. Get the conversion premium in writing. Ask whether supplemental EOI is on file.

Questions people ask about life insurance at work.