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What Does Employer-Provided Life Insurance Cover in Texas? 

June 21 2022
life insurance policy document

What if you weren’t taking advantage of the biggest benefits your job has to offer? 

Life insurance is a crucial benefit offered by many employers to their full-time employees. This life insurance can be a real game-changer because it helps protect your family and costs very little. 

Unfortunately, many who would most benefit from employer-provided life insurance don’t know what it covers, how it works, or even how to get started. 

Interested in getting life insurance through your job? Keep reading to learn everything you need to know! 

What Kind of Life Insurance Does My Texas Employer Offer? 

Life insurance provided by your employer is known as group life insurance. As the name implies, this is a kind of coverage that an employer can take out on behalf of a group. 

All employees should be eligible for some form of group life insurance. However, certain employees (such as longtime executives) may be eligible for a better caliber of life insurance. 

No employee is under any obligation to take out a life insurance policy. However, group life insurance is usually the cheapest way to get life insurance coverage, and this offers workers a positive incentive to get this insurance. 

How Does Group Life Insurance Work in Texas? 

If you should die, group life insurance will pay out a death benefit to whomever you designate as your beneficiary. However, your group life insurance is tied to your employer, so it will no longer be available if you quit or if you get fired. 

Beyond that, group life insurance can vary from employer to employer. For example, some employers may offer no coverage at all. Others may offer more or less of a death benefit, and it’s up to the employer whether employees can increase that death benefit. Additionally, employers decide whether group life insurance can only cover employees or if employees can get coverage for their spouses and children

How Much Coverage is Available Through a Job? 

The exact amount of how much is covered by your group life insurance will be determined by your employer. Most of the time, you receive a death benefit meant to cover your salary or a little beyond the salary. 

If an employee should die, their death benefit will pay out the covered amount to a designated beneficiary. Ideally, this money will be enough to help the beneficiary get back on their feet (especially if the beneficiary is a spouse facing a sudden loss of income). However, group life insurance benefits are usually much more limited than what you can get through private life insurance. 

At some jobs, employees can supplement their coverage amount and get a higher payout. As we noted before, upper-level executives may have access to better life insurance plans. 

The businessman's hand covers the wooden house with a block with the inscription INSURANCE. Family at home with a roof with inscription insurance. Family insurance concept.

How Much Is the Premium for Employer-Sponsored Life Insurance in Texas? 

The exact amount you pay for your premium depends partly on your employer and partly on your age. A certain amount of coverage is likely to be free, but beyond that, premiums tend to increase as you get older. 

The good news is that group life insurance is relatively cheap. Additionally, the premium typically comes directly out of your paycheck, meaning you have one less bill to worry about. 

As with other kinds of life insurance, though, coverage gets more expensive over time because older people are likelier to develop health conditions. It’s always worth reviewing the “fine print” of your policy to determine when your premiums will increase (these are usually based on age landmarks, such as an increase every five years). 

What Are the Benefits of Group Life Insurance in Texas? 

The primary benefit of group life insurance through an employer is that it is easier to qualify for and cheaper to pay for. If you have anyone who is dependent on you (such as a spouse or child), this is an easy way to take care of them if you should unexpectedly die. 

When you purchase life insurance on your own, insurance carriers often require health screenings. Someone who already has a medical condition may find it difficult to qualify for life insurance, but they are likely to qualify for a group life insurance plan. 

The premium for group life insurance is relatively cheap, especially compared to private life insurance, and these benefits are tax-free up to $50,000. Being able to provide for your family after you pass away offers great peace of mind to many people. 

Are There Any Drawbacks to Life Insurance Through Your Job? 

The primary drawback to group life insurance is that it is limited to your employer. Once you leave a specific employer, you will no longer have the coverage. 

This doesn’t matter as much if you are simply leaving one job that has group life insurance for another job that has it. If the new job does not offer it, or if you have a gap between employers, then you risk going without life insurance unless you get personal coverage during this time. 

Can I Add More Life Insurance? 

Most of the time, you can purchase supplemental coverage on top of your basic group life insurance. This helps provide a greater death benefit, but it also increases your premium, and you will likely need to have a physical exam. 

Often, group life insurance offers basic coverage that requires no exam. This is why it is easier to qualify for group life insurance even if you have existing health conditions. 

Once you add supplemental insurance, though, it may require underwriting, which will require you to complete a physical exam. The results of this exam will help the insurance carrier determine the cost of your supplemental insurance. 

Get the Best Life Insurance in Texas Today 

Now you know what employer-provided life insurance covers. But do you know where you can get great life insurance coverage at the click of a button? 

If you’d like a convenient life insurance quote online from Baja Insurance, you can request a quote online. Or if you’d prefer, you can always come into one of our local offices and chat with us. If you’re very busy, you can also just pick up the phone and give us a call at 800-401-6870


Life Insurance