The age-old idiom, “if it’s free, it’s for me,” can give workersa false sense of security when it comes to employer-offeredlife insurance.

A myth has emerged that the life insurance offered by employersprovides adequate protection for employees. However, the reality ofthe situation is that it does not. Throughout my 30+ yearsconsulting individuals on their life insurance needs, I’vewitnessed countless situations where individuals fall into thistrap. In reality, employer-offered life insurance typically onlycovers a fraction of the protection required for mostindividuals.

As a benefits professional, you understand that employer-offeredlife insurance is an added perk on top of health, retirement andother benefits a company offers, not a solution. In light ofSeptember’s Life Insurance Awareness Month, it’s an exceptionallyimportant time to educate employees, and guide them on the rightpath of financial well-being. Below are a few truths that dispelsome company-offered life insurance myths.

Insufficient level of coverage

Chances are the death benefit offered by employer life insurance is simply not largeenough to protect the policyholder’s loved ones for the rest oftheir lives. Financial experts differ in their estimates of howmuch life insurance is advisable based on the individual’s health,age, family situation, and other factors. But the suggested rangeis typically between 10 and 15 times their annual income. Foryounger individuals with lower salaries and longer careers ahead ofthem, the advised coverage amount could climb to as much as 30times their current yearly income.

However, most employers only offer one to three times theiremployees’ annual incomes, leaving a massive coverage gap. Whilethis level of coverage represents a low cost, or even sometimesfree option for employees, it simply does not provide sufficientprotection should the unspeakable occur.

Gaps in coverage when switching careers

Employer provided life insurance typically takes the shape of aterm policy with coverage ending when the employee is either laidoff or willingly leaves the company for another job. It is possiblethat their new employer may not offer as much coverage as they hadat their prior firm. While the employee is free to reapply forcoverage on their own, chances are their premium will be higher.Not to mention, there’s always the possibility the employee willdevelop a medical condition that could potentially make the policyunaffordable.

Permanent life insurance policies alleviate this issue byproviding coverage over the entire course of the policyholder’slifetime. While these policies are typically more expensive and arerarely offered by employers as part of their benefits packages,owners of permanent life insurance policies never have to worryabout losing their coverage, unless of course they fail to paytheir premium.

No living benefits

The life insurance provided by an employer typically only comeswith a death benefit, meaning the beneficiary will receive a payoutshould the insured pass away. However, permanent life insurancepolicies additionally provide access to the cash value of thepolicy while alive. This can come in handy as a quick access tocash that does not require the individual to dip into theirretirement savings should an unexpected expense arise.

The solution: Call in the experts

Employer-provided life insurance coverage simply does not offerenough protection to meet the needs of employees. Additionalcoverage is almost always required to make sure employees and theirloved ones are protected. It’s not the responsibility of members ofa company’s HR or benefits team to identify the rightfinancial products for each of the firm’s employees. While they’reexperts when it comes to maximizing the currently offered benefits,consulting on additional insurance coverage or investments is notpart of the job description.

However, many forward-thinking companies are beginning to expandtheir benefits packages to include access to a financial adviser toassist with these decisions. These advisers are called in to offereducational seminars and work individually with employees toeventually set them up for a secure financial future.

Don’t fall behind the curve by pretending your current lifeinsurance offering provides sufficient coverage for your employees.Instead, call in the experts to round out your benefits package andensure everyone at your company has the protection theyneed.