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As a teacher, you’ve probably pivoted more times than you can count in 2020. With a new school year around the corner, some districts are choosing to reopen buildings with strict safety measures in place. To prepare for the return to the classroom, familiarize yourself with your life insurance options, which could include a combination of group, supplemental and individual life insurance.
People who work in the education field have three main options for getting life insurance coverage. You have the flexibility to choose one option or a combination of each depending on your coverage needs.
Group life | Supplement | Individual life | |
---|---|---|---|
Policy limits | Low limits, usually capped at $50,000 | Mid-size limits, usually capped at 3x to 5x your salary | High limits |
Cost | Usually free | Low cost | Most expensive |
Portable | No | Yes, in most cases | Yes |
Convertible | No | Yes, in most cases | Yes |
Spouse and child coverage | No | Yes, for an additional cost | Yes, for an additional cost |
Medical exam or questionnaire | No | Sometimes | Sometimes |
Flexibility | None | Little flexibility | Most flexible |
Permanent life option | No | No | Yes |
These policies, sometimes referred to as basic life, are offered as part of your employee benefits. Premiums are typically subsidized, which means your employer fully or partially pays for your coverage, and any extra payments are deducted from your paycheck. Either way, group policies are a budget-friendly option for teachers in need of life insurance.
Along with offering cheap and sometimes free coverage, group policies are open to all full-time employees — making them ideal for seniors or teachers who have pre-existing medical conditions that can make it challenging to find coverage.
If your school participates in group life insurance, you’ll be able to sign up when you start working or during the annual enrollment period.
Choosing group coverage is a no-brainer if your employer foots the bill. However, there are a few downsides that may make you consider buying more coverage:
Most employers allow you to buy additional life insurance coverage to complement your basic group policy. This is known as supplemental or voluntary life insurance, and you’ll need to pay for it out of pocket — but you’ll access cheaper group rates. If you’re a high-risk applicant — such as a senior, smoker or someone who spends their weekend skydiving and hang gliding — it may be worth opting into supplemental life insurance.
Supplemental life is offered up to a maximum amount set by your school district and insurer. It’s usually up to $300,000 to $500,000 dollars or three to five times your salary, whichever is less. Try to opt for the maximum guaranteed issue amount, which is the most coverage you can purchase without having to take a medical exam. It’s usually around $200,000, and you’ll be able to increase your coverage by a specified amount each annual enrollment without going through medical underwriting. If you elect more than the guarantee issue amount, you’ll have to complete a medical questionnaire or medical exam to be approved for coverage.
Pros
Cons
If you want or need more coverage beyond what your school offers, you can purchase a term or permanent individual policy through a life insurance company, agent or broker. Choosing an individual term life policy is your cheapest and most straightforward option, offering coverage that lasts a set period of time — like 10, 15 or 20 years. Permanent life insurance includes policies that offer lifelong coverage that becomes a cash asset over time.
Purchasing an individual policy will allow you to purchase as much coverage as you need. Just tally up your assets, debt and financial obligation — like rent or child care — and aim to take out a policy to match. You’ll also be able to customize your coverage with add-ons, such as an accelerated death benefit rider, which pays out early if you’re diagnosed with a terminal illness. And, you won’t have to ensure your policy is portable to take it with you no matter where your career takes you.
How much life insurance do you need?
When you’re shopping around for coverage, keep these tips in mind:
Yes. Most insurers are issuing policies, but you can expect to be asked additional questions in your application.
Your insurer will want to know about any pre-existing conditions, especially if they’re related to the respiratory system. They’ll also want to know if you’ve traveled to any areas that have been hit the hardest by the coronavirus, and whether you’re experiencing a fever or respiratory symptoms.
Yes. If you have an active policy, your insurer will pay your beneficiaries if you die from COVID-19 or related complications. However, if you die within two years of taking out your policy, your insurer has the right to delay the payout while they investigate your death and confirm its cause.
If you’ve accumulated enough cash value in your permanent policy, you can tap into those funds to cover your medical expenses and other bills.
Another plus: your insurer can’t change your premiums if you’re diagnosed with the coronavirus, either.
Many schools, unions and member organizations across the US provide life insurance for teachers, including the National Education Association (NEA) and American Federation of Teachers (AFT).
A few insurers tailor policies to teachers, including:
The American Academy of Pediatrics has put together a comprehensive guide for safe, in-person learning.
These are the key steps schools should take to prevent the spread of COVID-19:
With schools gearing up to reopen across the US, now’s a good time to assess your life insurance coverage. If you have loved ones who rely on your teaching income, the group policy you have through work may not be enough. But you can top up your coverage by purchasing a policy on your own, and dip into any cash value you’ve built in your permanent policy to pay surprise bills.
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