If your employer offers free life insurance during open enrollment this fall, grab it. But if your workplace lets you buy additional coverage on top of that, ask some questions before spending any money. Here's what to consider:
How much life insurance do I need?
The free coverage (paid for by an employer) is typically one to two times your annual salary. That's probably not enough if you have financial dependents. How many years would you want to replace your income if you died tomorrow? Multiply that number by your salary and add enough to pay off debts and fund items like college. If you are single with no children or debts, for example — skip the additional coverage.
Can I buy enough?
There will be a limit on how much coverage you can get at work. That cap includes the amount your employer pays for, said John "Jamie" Kalamarides, president of Prudential Group Insurance. So if the limit is 10 times your annual salary and your employer pays for coverage equal to two times your salary, then you can buy up to eight times your salary at work. Will the maximum meet your needs?
What kind of life insurance is it?
The most common type offered through work is term life insurance. Term life lasts for a certain period, and is sufficient for many families. Sometimes you can buy permanent life insurance, such as universal life, through work. Permanent coverage lasts your whole life and includes cash value. It's more complicated than term life, so make sure you understand how the policy works.
How much will it cost?
