Open Enrollment Is Coming: Why Your Work Policy Might Not Be Enough

October 7, 2023 · Cedar Street Financial · Chillicothe, Ohio

For many Ohio workers, fall means open enrollment — the window when employers ask you to review your benefits and make your choices for the coming year. Tucked inside that packet, alongside the health plans that get most of the attention, there is often a line about life insurance. Many employees glance at it, see that they "have life insurance through work," and move on. That benefit is genuinely valuable. It is also worth a closer look, because group coverage through an employer has two characteristics families often do not realize until later: it is usually a modest amount, and it belongs to the job, not to you.

How employer coverage usually works

Many employers provide a basic amount of group life insurance at no cost to the employee, often expressed as a multiple of salary or as a flat amount, and many allow workers to buy additional coverage during enrollment, sometimes with limited or no health questions up to certain limits. That ease is a real advantage, and if your employer offers it, it makes sense to understand exactly what you have. Open enrollment is the natural moment to check: log in or ask human resources for your current coverage amount, what it costs you, and what options exist to increase it.

The amount may be smaller than your family assumes

The first gap is size. A basic employer benefit is designed as a starting layer for a whole workforce, not as a complete plan for any one family. Set it next to what many households would actually need — years of income for a surviving spouse and children, a mortgage balance, other debts, future education costs — and a benefit equal to a year or so of salary can come up short fairly quickly. That does not make the benefit bad. It makes it a foundation. The question open enrollment should prompt is whether your family is standing on a foundation and mistaking it for the whole house.

The coverage is tied to the job

The second gap is portability. Group coverage generally ends, or must be converted under specific terms, when you leave the employer — whether you quit, are laid off, change careers, or retire. Some plans offer options to continue or convert coverage, but those options have deadlines, conditions, and costs that differ from the group rate you have been paying. The practical risk is timing: the moment a person most needs to secure individual coverage might arrive right after a job loss, when the budget is tightest — or years later, when age and health changes can make new coverage more expensive or harder to qualify for than it would have been earlier.

An individual policy you own does not have this problem. It stays with you across employers, career changes, and self-employment, as long as premiums are paid. That is why many families combine the two: they take full advantage of inexpensive group coverage at work, and hold an individual policy sized to their actual needs as the stable base underneath it.

A short open-enrollment checklist

Before your enrollment deadline this fall, consider four quick steps. Confirm your current group coverage amount — do not guess. Run a rough estimate of your family's need using your income, debts, mortgage, and goals, and compare the two numbers honestly. Ask what happens to your coverage if you leave, and what conversion options exist. And if there is a gap, decide whether supplemental coverage through work, an individual policy, or a combination fits your situation and budget. Human resources can answer the plan-specific questions; the family-specific ones are yours to work through at the kitchen table.

Open enrollment comes around every year, but the review habit it encourages is the real benefit. Ten minutes with your actual numbers this October can turn "I think we have something through work" into genuine knowledge of where your family stands.

Frequently Asked Questions

Should we decline employer life insurance if it isn't enough on its own?

Generally no — basic group coverage is often provided at no cost or low cost, and it is a worthwhile layer. The point is not to choose between work coverage and individual coverage, but to understand what each one does and whether the total matches your family's needs.

Can we take our work policy with us if we change jobs?

It depends on the plan. Some group policies offer portability or conversion options, usually within a limited time window and at different rates. Ask your employer's human resources department what your specific plan allows before you need the answer.

Is supplemental coverage through work the same as an individual policy?

Not quite. Supplemental group coverage is still part of the employer's plan and is generally still tied to your employment. An individual policy is a contract you own personally, independent of any job. Each has its place, and families often use both.