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Life Insurance · 6 min read
Open enrollment: is your work life insurance enough?
What group coverage really covers, when it ends, and how to fill the gap while you are healthy.
Short answer: life insurance through work is a good start, but it is rarely enough on its own. It is usually a set amount, it belongs to your employer's plan, and it can end or cost more when you leave the job. Use open enrollment to check your real number, keep your work coverage, and fill the gap with a policy you own while your health is on your side.
Why this season matters
Many employers hold benefits open enrollment in the fall. It is often the one window each year to add or raise workplace coverage without waiting for a life event like a marriage or a new baby. Most people click "keep my current elections" and move on.
That habit can leave real gaps. In the 2026 Insurance Barometer Study by LIMRA and Life Happens, 27% of people with life insurance had only workplace coverage. The same study estimates 92 million U.S. adults need life insurance or more of it, and 47% of people said their household would feel the financial impact within six months if a primary wage earner died.
How workplace life insurance works
Workplace life insurance is common. In March 2026, 59% of private industry workers had access to a life insurance plan through work, and 98% of those with access took part, according to the Bureau of Labor Statistics. Plans usually come in layers:
- Basic life: often paid by the employer, set as a flat dollar amount or a multiple of your salary.
- Supplemental life: extra coverage you pay for through payroll. Plans may allow some amount without health questions, then ask for health information above that.
- Spouse and child coverage: smaller amounts for family members, also through payroll.
| Basic group life | Supplemental group life | Individual term life | |
|---|---|---|---|
| Who pays | Usually the employer | You, by payroll | You |
| Who controls it | Employer's plan | Employer's plan | You own the policy |
| If you leave the job | Usually ends; conversion may be offered | Usually ends; conversion or portability may be offered | Stays in force as long as premiums are paid |
| Price over time | Not your cost (taxes may apply over $50,000) | Varies by plan; often rises with age | Level for the term you choose |
| Health questions | Usually none | Sometimes, above a set limit | Yes, which sets your price |
Four gaps to check
- The amount. A salary multiple can sound large until you add the mortgage, debts, years of lost income and your children's education. Our DIME calculator gives a real number in two minutes.
- The job tie. Group coverage generally ends when your job does. Virginia's Bureau of Insurance notes that you can usually convert group life to an individual policy without a medical exam, but premiums will likely be higher. Layoffs, career moves and early retirement all trigger this.
- Price creep. Many supplemental plans price coverage by age, so the same amount can cost more as you get older. Check your plan's rate sheet, not just this year's deduction.
- Health timing. If your health changes while you rely on work coverage, buying your own policy later can cost more or become harder.
Taxes on coverage over $50,000
The IRS lets you exclude the first $50,000 of employer-provided group-term life coverage from income. For coverage above $50,000, the imputed cost, calculated from an IRS premium table, is added to your taxable wages and is subject to Social Security and Medicare taxes. It is often a small amount, but it is worth knowing why it shows up on your pay stub. TrueFin does not give tax advice; ask a tax professional how this applies to you.
Work coverage vs. your own policy
This is not either-or. Work coverage is easy and often free, so keep it. The question is what you build on top of it. Supplemental coverage at work can be convenient, especially if you have health issues and the plan offers coverage without health questions. An individual term policy is usually the better fit when you want coverage that follows you for 20 or 30 years at a locked price. Some families add indexed universal life for lifelong coverage and cash value.
Cost fears stop many people. The LIMRA and Life Happens study found that roughly three-quarters of Americans overestimate the cost of life insurance, and adults under 31 guessed about five to six times too high for a $250,000, 20-year term policy.
Agent tip: Get an individual term quote before you lock in supplemental elections. Then you can compare price, how long the rate is fixed, and what happens if you change jobs, side by side. Apply while you are still employed and healthy, not after a job change or a doctor's visit.
What open enrollment also covers
Your benefits menu likely includes health insurance, disability coverage, HSAs or FSAs, dependent care accounts, a 401(k) and sometimes long-term care coverage. These matter, and disability coverage in particular protects your income while you are alive. TrueFin Services does not sell health insurance, disability insurance, long-term care insurance or investment accounts. For those, talk with your HR or benefits team or a qualified professional.
We focus on life insurance and annuities. As an independent agent, Nag compares term and IUL policies from multiple carriers and can show how an individual policy fits with what you already have at work.
What to look out for this season
- Find your basic life amount on your benefits portal and write it down.
- Note your enrollment deadline. Changes outside the window usually need a qualifying life event.
- Update beneficiaries on every work and personal policy, especially after a marriage, divorce or new child.
- Check how much supplemental coverage you can get without health questions, and what happens above that.
- Read the conversion and portability section of your plan summary.
- Look for imputed income from group life on your pay stub if your employer-paid coverage is over $50,000.
- Run your number with the DIME calculator and compare it to your total coverage.
- Get an individual term quote before the window closes.
Sources
Questions
Is life insurance through work enough?
For many families it is a helpful start but not the whole answer. Workplace coverage is often a set amount or a multiple of salary, and it is tied to your job. Add up your debts, income needs, mortgage and education goals, compare that to your work coverage, and cover the gap with a policy you own.
What happens to my work life insurance if I leave my job?
Group coverage usually ends when employment ends. Many plans let you convert to an individual policy without a medical exam, but premiums for converted coverage are likely to be higher, and there is a short deadline. Check your plan's conversion and portability rules before you leave.
Is employer-paid life insurance taxable?
The first $50,000 of employer-provided group-term coverage is excluded from income. The cost of coverage above $50,000, figured from an IRS table, is added to your taxable wages and is subject to Social Security and Medicare taxes. Ask a tax professional how it affects you.
Should I buy supplemental life at work or my own term policy?
Compare both. Supplemental coverage can be easy to get, sometimes without health questions up to a limit, but it usually stays with the employer and pricing may rise with age. An individual term policy is yours, keeps a level premium for the term, and goes with you if you change jobs. Many people use both.
Sources and further reading
- National Association of Insurance Commissioners (NAIC): consumer guides to life insurance and annuities
- Virginia State Corporation Commission, Bureau of Insurance: verify an agent's license
- AM Best: insurer financial strength ratings
- IRS: tax rules for life insurance and annuities
Your price is based on your age and health today.
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