Do I Need Supplemental Life Insurance?

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You may want to purchase a secondary life insurance policy if your primary life insurance is through your employer and you want more coverage than your employer-sponsored group plan will provide. Your employer may offer supplemental coverage or you may need to purchase a standalone policy for yourself.

Keep reading to learn more about supplemental life insurance including the types of policies you can buy and the amount of coverage you may need.

Key Takeaways

  • Supplemental life insurance refers to any type of coverage you buy in addition to your primary life insurance policy, especially if your employer provides your primary coverage.
  • For extra coverage, you could buy a separate term or permanent life insurance policy, shop for more specialized coverage types such as accidental death and dismemberment insurance or add riders to enhance your existing policy.
  • Employer-sponsored life insurance is often cheaper than individual coverage and may not require a medical exam, although you could also lose your coverage if you lose your job.
  • Some experts recommend purchasing five to 10 times your salary in life insurance coverage but employers often only offer one to two times your salary in primary coverage.
  • If you buy your own supplemental life insurance policy, your rates will likely depend on factors like your age, sex, health status and policy details.

What Is Supplemental Life Insurance?

Supplemental life insurance refers to a policy you purchase in addition to your main life insurance in order to secure more coverage. You likely won’t need supplemental coverage if your primary coverage is an individual plan you bought for yourself since you should be able to customize an individual plan to adequately meet your coverage needs.

As a result, supplemental life insurance makes the most sense for employees who are primarily covered by an employer-sponsored group life insurance plan.

For example, if you are the sole insured covered by your primary life insurance, you could purchase separate policies that cover your spouse or children. In addition, basic life insurance through your employer will generally provide a death benefit of one to two times your salary, so you may want a second life insurance policy if you’re interested in a larger death benefit.[1]

In some cases, your employer may offer supplemental coverage on top of your primary life insurance. Otherwise, you should be able to purchase a secondary plan separately if your current coverage is insufficient.

How Does Supplemental Life Insurance Differ From Regular Life Insurance?

Supplemental life insurance fundamentally functions the same as regular life insurance, although you may have more freedom to adjust the specific benefits and policy details of a supplemental plan than you do with your employer-paid group life insurance coverage.

That said, there are various pros and cons to weigh when deciding whether you should purchase additional life insurance through your employer or reach out to an insurance company to obtain extra coverage yourself. For example, job-based plans may lack portability, meaning your coverage won’t continue if you leave your job.

On the flip side, life insurance through your employer is generally cheaper since your employer covers some or all of the premium on your behalf. Employer-provided life insurance also tends to be guaranteed issue, which means you don’t run the risk of being denied coverage based on your health status.[2]

How Does Supplemental Life Insurance Work?

In general, you must make regular premium payments to your life insurance company to maintain coverage and, in exchange, your insurer agrees to pay out a predetermined death benefit to your beneficiaries if you die while your policy is in force.

If you have two policies, you may need to pay two premiums in order to keep all of your coverage active. However, if you receive coverage through your employer, your share of the premium payment may be automatically deducted from your paycheck and given to the insurer on your behalf.

What Types of Supplemental Life Insurance Are There?

You may have various options when shopping for supplemental life insurance ranging from major coverage types you could select for a primary policy and other coverage types that address more specific situations. The types of life insurance you can buy if you want supplementary coverage include the following:

  • Term life: Term life insurance covers you for a limited window of time, usually lasting between one and 30 years.[3] Term life insurance tends to be a relatively cheap option since there is no guarantee that you will die while the policy is active and therefore no guarantee that your insurance carrier will have to pay out a death benefit.
  • Whole life: Whole life insurance is the most common type of permanent life insurance and, as its name suggests, it should cover you for your entire life, meaning your beneficiaries will receive a death benefit no matter when you die.[4] Whole life insurance policies also accumulate cash value that you may be able to withdraw or borrow against later in life.
  • Universal life: Universal life insurance is a type of permanent life insurance that allows you to adjust your premium and death benefit over time. Subsets of universal life insurance include indexed universal life insurance, which places a minimum and maximum on the amount of cash value the policy can lose or accrue based on the performance of a stock market index, and variable universal life insurance, which is also based on market performance but places no minimum or maximum on the amount of cash value the policy can lose or accrue.
  • Burial: Also known as funeral insurance or final expense insurance, burial insurance provides a relatively small death benefit that is only intended to cover end-of-life expenses such as funeral and burial or cremation costs. While burial insurance coverage may last for your entire life, it generally costs less than other types of permanent life insurance due to its low payout.
  • Accidental death and dismemberment (AD&D): AD&D insurance pays out a death benefit if you are killed in a covered accident but not if you die of natural causes. However, you may be able to claim a portion of the death benefit if you survive a covered accident that leaves you severely injured or impaired.

How Much Supplemental Life Insurance Do I Need?

Some experts recommend maintaining life insurance with a death benefit that is five to 10 times your salary, so you could subtract your primary policy’s death benefit from this recommended death benefit to determine how much supplemental life insurance you need.[1] For example, if you make $60,000 per year and your job-based plan offers a $120,000 death benefit, you could buy a secondary plan with a death benefit between $180,000 and $480,000.

That said, you may want more or less coverage depending on how many dependents you have and what expenses you want to help them cover after you die. Relevant factors to consider include how much money it would take to keep your spouse afloat if they rely on your income and whether you are still paying off a mortgage or your children’s student loans.

Are There Alternatives to Supplemental Life Insurance?

If you don’t feel that you need an entire policy to supplement your existing coverage, you could instead request to add life insurance riders that can bolster your primary policy in exchange for paying a higher premium. Available riders will likely vary from employer to employer but some of the additional coverage options you may encounter include the following:

  • Waiver of premium: This add-on can suspend your life insurance premium payments if you become disabled.
  • Accelerated death benefit: If you buy this rider, you will receive a portion of your death benefit before you die if you contract a terminal illness. Keep in mind that the amount of money you receive before dying may be deducted from your beneficiaries’ payout after you die.
  • Long-term care: Your life insurance policy may be able to help you pay for long-term care services in the event that you become unable to carry out basic living activities on your own.
  • Return of premium: Term life insurance policies may be eligible for a return of premium rider, which refunds some or all of your premium payments if you survive to the end of your coverage term.
  • Family income: Rather than paying out a lump sum, your insurer will pay the death benefit to your beneficiaries in monthly installments in order to effectively replace your income if you buy this rider.
  • Estate protection: If your death benefit will go to your estate after you die, you may want to add estate protection to your policy to secure extra coverage that can offset the impact of estate taxes.
  • Term conversion: With this rider, you may be able to convert your term life insurance policy into a whole life insurance policy toward the end of the coverage term, allowing you to extend your coverage without undergoing another medical underwriting process.
  • Children’s level term insurance: Also known simply as a child rider, a children’s level term insurance rider provides a death benefit if your child dies before a certain age, potentially up to age 26. This rider may exclude coverage for a child who is less than 15 days old or hasn’t been discharged from the hospital since being born. In addition, the rider may expire once you turn 65 regardless of how old your child is.[5]

How Much Does Supplemental Life Insurance Cost?

Since supplemental life insurance is fundamentally the same as primary life insurance, the factors that influence the cost of coverage should be the same. Keep in mind that, if you receive coverage through an employer, your policy could be free or you could only have to pay a fraction of the premium for either primary or supplementary coverage.

Otherwise, life insurance rates generally depend on factors like your age, sex and health along with the amount of coverage your policy provides and the length of the policy’s coverage period. For example, New York Life would charge a 35-year-old healthy male $273.56 per month for a whole life insurance policy with $250,000 worth of coverage and no riders.[6]

How To Get Supplemental Life Insurance

If you want to receive supplemental life insurance coverage through your employer, you should reach out to your company’s human resources (HR) department. Meanwhile, if you’re interested in individual coverage, it’s helpful to comparison shop by acquiring quotes from at least three to five different life insurance companies.

The best way to comparison shop is by using SmartFinancial’s online insurance platform. We can take information you give us in a simple questionnaire and share it with insurance agents who can provide you with no-cost quotes. To get started on receiving life insurance quotes today, type your zip code in the box below.

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When should I get supplemental life insurance?

You may want to consider buying supplemental life insurance if your main policy is through your employer but you want additional coverage such as a higher death benefit or coverage for other members of your family.

Do employers offer supplemental life insurance?

Yes, you may be able to receive supplemental life insurance through your employer in addition to a primary group life insurance policy.

Is supplemental life insurance worth it?

Not everyone needs extra coverage but it may be worth buying supplemental life insurance if you have multiple dependents and your employer doesn’t offer primary coverage with a high enough death benefit to meet your family’s needs in the event that you die.


  1. Guardian Life. “Supplemental Life Insurance: Should You Consider Buying It?” Accessed Nov. 20, 2023.
  2. Guardian Life. “Is the Life Insurance You Have Through Work Enough?” Accessed Nov. 20, 2023.
  3. Insurance Information Institute. “What Are the Principal Types of Life Insurance?” Accessed Nov. 20, 2023.
  4. Insurance Information Institute. “What Are the Different Types of Permanent Life Insurance Policies?” Accessed Nov. 21, 2023.
  5. United States Securities and Exchange Commission. “Children’s Level Term Insurance Rider.” Accessed Nov. 20, 2023.
  6. New York Life. “How Much Does Life Insurance Cost?” Accessed Nov. 20, 2023.

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