Home >> Solutions for Individuals >> Life Insurance >> Difference Between an Individual Policy and Employer Sponsored Policy
Do you work for a company that offers life insurance? Learn why owning an individual policy separate from an employer sponsored policy may make more sense below. More information about life insurance also can be found on the Life Insurance main product page.
Just like the names suggest, your employer is the owner of an employer-sponsored insurance policy, whereas you are the owner of an individual life insurance policy. Employer-sponsored policies are only available while you work for that employer, but a personal policy will follow you anywhere.
Just because your employer offers life insurance, it doesn’t mean you shouldn’t also have an individual life insurance plan. The type of coverage your employer offers may not be sufficient, or you could lose your policy if you change jobs or your employer decides to cut back on benefits.
If your employer offers life insurance, that is great. But it definitely should not be your only life insurance policy. Employer-sponsored plans usually have work-related restrictions. For example, your coverage might require an “active” working status. So, if you become ill or have to take time off of work, your coverage might lapse. Not to mention your coverage completely disappears if you leave your job.
If you have individual life insurance, it doesn’t matter if you change jobs; the policy has nothing to do with your employer. However, if you have employer-sponsored life insurance and leave your current employer – then you lose it.
You need individual life insurance, so you are not beholden to any employer. And as a freelancer or independent contractor, the flexibility of your own policy means that you can continue to decide who you do or do not work with.