Supplemental Life Insurance: What It Is and How It Works

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Definition of Supplemental Life Insurance

Supplemental Life Insurance is an additional life insurance policy that supplements a basic life insurance policy, typically offered by an employer. It allows individuals to increase their life insurance coverage beyond what is provided as a standard employee benefit.

Supplemental Life Insurance

Key Features

  1. Optional Coverage: Above and beyond standard employer-provided life insurance.
  2. Employee-Paid Premiums: Premiums are usually paid by the employee, often through payroll deductions.
  3. Flexible Amounts: Coverage amounts are chosen by the employee and can be more tailored to individual needs.

Who Needs Supplemental Life Insurance?

  • Individuals with High Financial Responsibilities: Such as those with dependents, significant debts, or high living expenses.
  • Those Seeking Additional Security: Beyond the basic coverage provided by employers.



  1. Dependent on Employment: Coverage is often tied to the current job and may not be portable if you leave.
  2. Cost: Can be more expensive than purchasing additional coverage through an individual policy.
  3. Coverage Caps: Some policies have limits on the maximum amount of coverage.

How It Works

  • Enrollment: Employees opt-in for supplemental coverage during enrollment periods.
  • Choosing Coverage: Select the desired amount of additional coverage, often a multiple of the salary.
  • Premium Payments: Premiums are calculated based on age, health, and chosen coverage amount and are deducted from the employee’s paycheck.
What Is Supplemental Life Insurance


Supplemental Life Insurance provides an opportunity for employees to increase their life insurance coverage to better match their personal and financial circumstances. It’s a valuable option for those needing more than what is offered through standard employer policies, though it’s important to weigh its cost and limitations. Contact us today for a free quote.

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Frequently Asked Questions

What is an example of supplemental life insurance?

Supplemental life insurance is an additional policy you can purchase to increase your coverage. An example could be a policy provided by your employer with the option to buy more coverage.

Should I buy supplemental life insurance at work?

Whether to buy supplemental life insurance at work depends on your circumstances, financial needs, existing coverage, and the affordability and terms of the supplemental policy offered.

Is employer supplemental life insurance worth it?

Employer supplemental life insurance can be worth it if it offers adequate coverage at affordable rates, especially if you have dependents or financial obligations that exceed your existing life insurance coverage.

Can I cash out my supplemental life insurance?

Generally, you cannot cash out supplemental life insurance, as it is typically a term policy without a cash value component. Only certain types of whole life insurance accumulate cash value.

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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