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Life insurance for teachers
Group life insurance through your school is a great perk, but it may not be enough.
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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.
What's in this guide?
Life insurance options for teachers
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.
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| 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 |
Group life for educators
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.
Downsides to group life
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:
- Low policy limits. Group life coverage tends to be capped at small amounts, like $50,000 — which may leave you underinsured, especially if you’re a breadwinner, parent or homeowner.
- Can’t take it with you. Because group life is tied to your workplace, you may not be able to take your policy with you if you change jobs.
- Part-timers not eligible. Most school districts only offer coverage to employees working over 20 hours, so if you’re not a full-timer you may not qualify for your school’s group life policy.
- No customization. Since a group life policy is set up and determined by your employer, you won’t be able to customize your policy with add-ons specific to your needs, such as an accelerated death benefit rider.
- No spouse or child coverage. Your group’s basic life insurance will only cover you, and doesn’t allow the option to choose additional coverage for your spouse or child, as supplemental and individual life do.
Supplemental life for educators
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 and cons of supplemental life
Pros
- Usually cheaper than individual life insurance, especially for educators.
- Purchase additional life insurance for your spouse and children, capped at 50% of the amount of coverage your purchase for yourself for your spouse and $5,000 or $10,000 for kids.
- Usually convertible so you can change your policy into permanent life insurance if you leave your job for a fee.
- Take your coverage with you if you change jobs, though your coverage will end if your original employer ends its policy.
- Purchase coverage up to a set amount — typically up to $200,000 — without answering any health questions.
- Increase your coverage amount — usually by $10,000 — at each enrollment period without answering any health questions.
Cons
- Voluntary life does not offer permanent life options, only term life.
- You won’t have the option to customize your policy with riders of your choosing, although most school policies include an accelerated death benefit rider and waiver-of-premium rider.
- If you decide you want coverage, but didn’t purchase supplemental life within a specified amount of days after being hired — usually 31 days — you’ll have to complete a medical questionnaire to be approved.
- Voluntary life rates are based on age and will increase each time you reach a new five year age bracket.
Individual life for educators
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.
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Downsides to individual life
- Generally more expensive. Individual policies tend to be more costly than having a combination of basic and supplemental life. Although, your final premium will be based on your health, which type of policy you purchase and the coverage amount you choose.
- May require a medical exam. If you aren’t in the best of health or you’re buying a large amount of life insurance, you’ll likely be required to take a medical exam.
Head-of-the-class tips to getting the best policy
When you’re shopping around for coverage, keep these tips in mind:
- Buy a policy that can replace your income. To make sure your family has the money they need to cover their living expenses when you’re gone, aim to buy a policy worth five to 10 times your annual income. So if you earn $50,000 a year, go for a $250,000 or $500,000 policy.
- Purchase a policy as soon as you need it. If you have dependents, debts or assets to your name, life insurance can secure your family’s financial future. Premiums increase with age, so try to lock in a low rate while you’re young and healthy.
- Choose the right term. Think about your longest financial obligation, and try to take out a policy of the same length. For example, if you have young children or 20 years left on your mortgage, you might buy a 20-year policy. Or if you’re a decade away from retiring, a 10-year policy can provide peace of mind until you start receiving Social Security benefits.
- Only buy a policy you can afford. If you fail to pay your premiums on time, your insurer can cancel your coverage. Some life insurance is better than none, so make sure your premiums are affordable before committing to a policy. You can always add more coverage later on — a strategy known as “laddering.”
- Review your coverage regularly. Aim to assess your coverage with every major life change — like getting married, having a baby or climbing the career ladder.
Can I still buy life insurance during the pandemic?
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.
Is the coronavirus covered by life insurance?
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.
Who offers life insurance for educators?
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:
- Horace Mann Educators Corporation
- MetLife
- New York Life Insurance Company
- Prudential
- The Hartford
- OneAmerica
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How to stay safe at school
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:
- Require all students and teachers to wear a mask during the school day.
- Space desks 6 feet apart.
- Assign seats to bus riders.
- Encourage students to wash and sanitize their hands frequently.
- Disinfect desks and computers after each use.
- Leave classroom doors open and avoid touching doorknobs.
- Allow students to eat outdoors or at their desks, rather than in crowded cafeterias.
- Mark hallways with one-way arrows to control the flow of people.
- Move activities outside, where possible.
- Set up a system where teachers move between classrooms, not students.
- Stay home if you feel unwell or have a fever.
- Ensure students and teachers are up-to-date on their vaccinations — especially the flu shot.
Bottom line
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.
Life insurance is part of a healthy financial plan. While you’re in planning mode, compare life insurance companies to get the coverage you need at the lowest possible price.
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