16 May Should I buy into this employer-offered life insurance?

Q. My employer just changed benefits and now I have the option of getting a whole life insurance policy up to $100,000 without a medical exam. The plan is portable, meaning I can take it with me if I ever leave the job. Premiums would be from payroll deductions. How can I tell if it’s a good deal?
— Still working

A. We hope you’re through the headaches of choosing the rest of the benefits offered by your employer.

There’s a lot to consider to decide whether this policy is “a good deal.”

The words “whole life” can mean many different things, said Ed Gaelick, a Chartered Life Underwriter and Chartered Financial Consultant with PSI Consultants in Glen Rock.

“Is it is ‘pure’ whole life from a mutual life insurance company where costs are fixed contractually, the policy offers guaranteed cash values, you share in company profits in the form of dividends, cash values have no market risk, etc., or is it a quasi-whole life policy with interest rate risk, market risk, the cost of insurance technically increases annually, does not participate in profits and more?”

Gaelick said only a professional can give you the proper guidance.

“It makes sense to pull in an expert to analyze and possibly compare to other carriers and plans,” he said. “However, if you are at all compromised health-wise where medical underwriting would be a challenge in the open market, this opportunity would likely make sense.”

It’s important to note that “no medical exams” does not mean guaranteed issue, he said, and you may very well need to answer health questions.

Good luck!

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This story was originally published in May 2024.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.