Oklahoma Life Producer Practice Exam

Why is relying solely on employer group life insurance usually inadequate?

1. It covers only workplace injuries

2. Policies are customized for individuals

3. Insufficient coverage for end-of-life expenses

4. It provides lifetime coverage

The correct answer is: Insufficient coverage for end-of-life expenses

Relying solely on employer group life insurance is often inadequate primarily because such policies typically do not provide sufficient coverage for end-of-life expenses. Employer group life insurance is usually designed to meet the basic needs of employees and may only cover a multiple of the employee's salary or offer a fixed benefit amount. This coverage may not be enough to cover expenses such as medical bills, funeral costs, and outstanding debts that can arise at the end of life. Additionally, employer group life insurance coverage often ends when the employee leaves the company, whether through job change, retirement, or layoffs, leaving them without any coverage in later years when their need for life insurance may be greater. It is crucial for individuals to seek additional life insurance outside of employer offerings to ensure that their loved ones are financially protected and that all end-of-life expenses can be adequately managed. This consideration of comprehensive financial planning is vital for long-term security.