Policy Check

Life Insurance for Union Workers

Written by Universal Life Insurance Check

Why Do Union Workers need Life Insurance?

Life Insurance for union workers is necessary to protect your family in the worst-case scenario.  Every individual has their own unique primary reason he or she has life insurance on themselves but some of the most common reasons individual state they have life insurance are to leave an inheritance, to pay off debts and other expenses, to add more financial stability to their financial plan, to bring peace of mind, you’re planning on starting a family, your job is high risk, you support your family financially, among many other reasons.

What does it mean to be in a Union?

A labor or trade union is an organization of workers dedicated to protecting members’ interests and improving wages, hours and working conditions for all. No matter what you do for a living, there’s a union with members who do the same thing. Unions represent mechanics, teachers, factory workers, office workers, actors, musicians, police officers, construction workers, airline pilots, janitors, plumbers, doctors, pharmacists, IT/computer professionals, government workers at all levels, engineers, writers, nurses, and many more types of workers.

What are the benefits of being in a Union?

The main reasons to join a union are higher pay, better benefits and a voice on the job. As a union member, you have a collective voice regarding things such as: Pay and wages; Work hours, Benefits (including but not limited to: retirement plans, health insurance, vacation and sick leave, and tuition reimbursement); Workplace health and safety, and ways to balance work and family.

More benefits of union membership are: union employees make an average of 30% more than non-union workers, 92% of union workers have job-related health coverage versus 68% of non-union workers, and union workers are more likely to have guaranteed pensions than non-union employees.

What are the disadvantages of being in a Union?

 Labor unions can discount worker education and experience. Many jobs that are offered in a unionized environment come through seniority instead of education and experience. This means someone who has been at a specific job or company the longest will automatically have the first option to receive a promotion or a job transfer. This also works in reverse. If there are layoffs that have been agreed upon, the least senior person is the first one to go, even if they are the most qualified.

Labor unions require ongoing dues and may require initiation fees. Union dues are often deducted from a worker’s salary automatically and is a percentage of that worker’s salary. In most circumstances, the dues are 1.5-2.5% of what the union worker earns. There may also be initiation fees which must be paid to join the union in the first place. These fees can reduce a lot of the salary gains that workers experience by being in a unionized environment.

Labor unions may participate in activities that workers disagree upon. Most states in the US allow unions to spend money on political lobbying and internal lobbying for specific causes. Not every worker may agree with the candidates that a union may endorse or a cause that the union may lobby for, but their dues are still being spent on those causes. A few states have allowed workers to opt out of that portion of their union dues if there is disagreement, but that is an exception more than a rule.

Labor unions discourage individuality. There is strength in numbers, which is a tremendous advantage for worker safety and security. Working in groups also tends to generate “group think,” which limits individual creativity. Workers are often bound by the decisions a union will make, even though they disagree with them. All it may take is a majority vote for an action to be taken and then you’re stuck with that decision unless you decide to resign.

Group Life insurance vs Individual Life Insurance for Union Workers

Group life insurance for Union workers can be beneficial because it features: Income tax-free death benefit, minimal or no medical underwriting, and the potential to add additional coverage for dependents. However, it can be a one-size-fits-all type of policy. Depending on the plan, the amount of coverage may be fixed, you probably can’t choose the insurer and the type of policy is limited. You typically get the same policy as any co-worker in your company.  Working with your financial professional, you can apply for individual life insurance protection that gives you the amount of coverage necessary to help protect your family.

Group life insurance for Union works might not be ideal because coverage is tied to your job. If you leave your job, you may not be able to take the policy with you. This is often referred to as the policy’s portability. You might be able to convert your group policy to individual life insurance if you leave, but the cost could go up significantly. If your next job doesn’t offer group life insurance, you could buy an individual policy from the open market. However, the cost of life insurance typically increases as you age, and you never know if you might develop a medical condition that could seriously raise your rates.

Limited choice. Coverage through work tends to be a type of term life insurance, and employers typically only work with one carrier. Therefore, you won’t find the range of policy options that you might find outside of work. If you’re looking for a more complex product like whole life or universal life, you should consult a financial advisor.

Low coverage amounts. You might not be able to buy as much life insurance as you need through your employer, as coverage amounts vary and can be low. If you need more coverage, you might want to buy an individual term life insurance policy instead of — or in addition to — your basic group life policy.

Individual Life insurance for Union Workers

In contrast, individual life insurance for Union workers may be the better options for those looking for: an individual Policy that is owned by you, unmatched rate stability, life insurance that lasts into retirement and up to age 100, death benefit that does not reduce due to age, coverage on children and grandchildren without having a policy on yourself, can be continued even if you leave your employer

What You Can Do

If you have any questions regarding your financial situation or what type of life insurance policy is correct for you and your family please reach out to a financial profession to get tailored advice to your unique situation.

About Universal Life Insurance Check
About Universal Life Insurance Check

We work with individuals across the nation to secure the best life insurance rates.

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