Myths About Life Insurance – Myth #5: “I Don’t Need Life Insurance Because I Get It Through Work”

Financial Horizons: Insights for Building Wealth and Securing Your Legacy

By Dr. Jose G. Cardenas, Chief Tax Strategist at The C & R Group, LLC

This is one of the most dangerous misconceptions in personal finance. Many people believe their employer-provided life insurance policy is enough to protect their families. The truth? It’s usually not even close — and it could disappear the moment you change jobs.

1. Employer Coverage Is Temporary — Not Permanent

Most employer-sponsored life insurance policies are group term policies, meaning they only last as long as your employment. When you leave that job — whether by choice, layoff, or retirement — your coverage usually ends.

Think about it: if you’ve built your career around one employer and lose that job, your family could lose their financial safety net overnight. Life insurance tied to your employer isn’t ownership — it’s borrowed protection.

Real security comes from owning your own policy — one that stays with you no matter where you work, live, or retire.

2. The Coverage Amount Is Usually Too Low

Typical group life policies cover one or two times your annual salary. While that may sound decent, it falls drastically short of what most families need.

For example, if you earn $75,000 a year, your work policy might pay $150,000 — yet the average American household needs six to ten times their income to replace lost earnings, pay off debt, cover funeral expenses, and fund their future goals.

That’s the gap an individually owned policy can fill — providing true peace of mind and comprehensive protection.

3. The Illusion of “Free Coverage”

Yes, many employers cover the premium — but that doesn’t mean it’s “free.” You’re paying with limited flexibility, low coverage, and zero portability.

Worse, employer policies are often taxable if the coverage exceeds $50,000. So while you may think it’s a free perk, you could end up paying more in taxes or losing benefits when you need them most.

When you own your own policy — especially a permanent plan like an Indexed Universal Life (IUL) policy — your coverage stays with you, your premiums are locked in, and your benefits can even grow tax-deferred.

4. Control and Customization Matter

At The C & R Group, LLC, we help professionals like you take control of their coverage with flexible, customized life insurance plans that go far beyond the basic group term policy.

With a properly structured IUL, you can:

• Build tax-free cash value over time
• Protect against chronic illness through living benefits
• Fund your retirement with tax-free withdrawals
• Create generational wealth independent of your employer

Your career may change — but your protection shouldn’t.

The Bottom Line

Employer coverage is a nice perk, but it should never be your only plan. True financial protection means owning your life insurance, not renting it through your job.

A customized plan through The C & R Group, LLC ensures your family, your future, and your finances stay protected — no matter what happens in your career.

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About the Author

Dr. Jose G. Cardenas is a retired U.S. Army Finance Officer and the Chief Tax Strategist at The C & R Group, LLC. With a Doctorate in Business Administration and over 20 years of experience in financial strategy, tax planning, and life insurance, Dr. Cardenas helps individuals and business owners protect their wealth and build a legacy. Learn more at www.thecrgroupllc.com.

📌 Disclosure

This article is for educational and informational purposes only and is not intended to serve as personalized legal or investment advice. Dr. Jose G. Cardenas, DBA, provides tax advisory services through The C & R Group, LLC. Insurance strategies, including Indexed Universal Life (IUL) and annuity products, may be offered through his role as a licensed financial professional affiliated with Experior Financial Group.

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