Dave Says: We get accidental death coverage at work.  Do we need extra insurance?

Dear Dave,

My husband and I are wondering if we need term life insurance policies. We both have accidental death and dismemberment coverage provided free of charge through our employers. Do we need additional coverage?


Dear Rebecca,

Yes, you both need to find good level term life insurance immediately! Accidental death and dismemberment policies are nothing but gimmicks. You need to make sure your family is taken care of in the very best way possible, no matter how you die.

You should always have life insurance coverage that’s separate from anything an employer may offer. Think about it. You don’t want to suddenly lose coverage if you change jobs, or have to leave your place of work because you’re diagnosed with a major medical condition.

Both of you need 10 to 12 times your yearly incomes in good, level term life insurance. If you make $50,000 a year, that means you need $500,000 to $600,000 in coverage. Remember, the idea of life insurance is to take the place of income. If one of you died, the other could invest the insurance money, make 10 percent on that money over time with good mutual funds, and replace any lost income.

Term life insurance is very affordable. For just a few dollars a month you can leave your loved ones in great financial shape after you die!