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April 11th, 2020

Essential Things to Know About Employer-Provided Life Insurance

Planning for the future should include considering what would happen if you were to suddenly die. Would your loved ones be able to afford funeral expenses? Would you leave behind a spouse or partner that relies on your income? Would you leave behind children you financially support?

If you are worried that your loved ones and family would not fare financially well if you were to die, then you should consider getting employer-sponsored or employer-provided life insurance.

What Is Life Insurance?

Life insurance is a type of insurance policy that provides payments to the named beneficiaries in the event of your death. The payment amount depends on the type of coverage you have. Amounts could range from as little as a few thousand dollars upward to $100,000 or more.

When deciding coverage amounts, think about your normal monthly expenses. It is also a good idea to take into account the balance owed on your mortgage, car loan, and credit cards held jointly with your partner or spouse.

What Does Life Insurance Cover?

Life insurance coverage pays for expenses related to your death. These could include, but may not be limited to:

  • Medical Bills
  • Hospital Bills
  • Funeral Expenses
  • Burial Plot

In addition, life insurance also provides payment for future lost income to cover expenses and financial support for your loved ones, such as:

  • Mortgage/Rent Payments
  • Credit Card Payments
  • Car Loans
  • Child Support
  • Spousal Support
  • College Tuition
  • Utility Expenses

The amount of coverage you select will depend on how long your surviving family will be able to support themselves without your income.

When Should You Get Employer-Sponsored Life Insurance?

Employer-sponsored life insurance plans are a great idea when you want to ensure your family is prepared financially should you die unexpectedly. Some employers offer what is called basic life insurance with optional supplement life insurance.

Basic life insurance is normally a set amount, like your base annual salary, two times your base annual salary, etc. Some companies pay for basic life insurance for their employees, while other employers offer it for a nominal cost.

Supplemental life insurance is a group life insurance policy where you can increase the amount of coverage you have. The main benefit of a group policy is that the costs to increase coverage are much less compared to getting a supplemental plan on your own.

Sometimes, you may have to undergo a medical examination for supplemental life insurance based on the amount of the policy. Other times, no examination is necessary.

Another issue concerning obtaining life insurance through your employer is you keep the policy as long as you remain employed with the employer. Should you change jobs, your coverage will end at a set date.

However, your new employer may also offer employer-provided life insurance. If not, then you could pursue obtaining an individual life insurance policy. At the very least, you should get basic life insurance coverage even if you opt to not get supplement life insurance coverage through your employer.

How Is a Claim Filed?

Upon your death, your surviving family can file a claim against the policy. The life insurance company will issue a payment to the named beneficiaries based on the percentage you designated.

What Should You Do if You Are Having Issues Filing a Claim?

If you are having issues filing a claim, it is best to speak with a personal injury lawyer as soon as possible. Getting assistance from a personal injury attorney may be necessary to ensure you receive the right amount of compensation.

For help filing an employer-sponsored life insurance claim and sound legal advice, please feel free to contact Schechter, Shaffer & Harris, L.L.P., Accident & Injury Lawyers for a FREE consultation and to speak to one of our personal injury lawyers today!

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