Is Employer Life Insurance Enough in Texas? Probably Not—Here’s Why

If you live in Texas and your job offers life insurance, that’s a great start—but here’s the truth most people don’t hear:

It’s probably not enough.

Thousands of Texans believe they’re covered just because their employer offers a policy. But when something unexpected happens, that limited coverage often falls short—leaving families unprepared and overwhelmed.

Here’s exactly why relying only on workplace life insurance could be a costly mistake—and what you can do instead.

1. Most Employer Life Insurance Only Covers 1x Your Salary

Let’s say you make $65,000 a year. That means your policy through work likely pays out just $65,000 if you pass away.

Now do the math:

• Funeral costs in Texas = $10,000–$15,000
• Mortgage = $200,000+
• Kids’ needs? Still ongoing.
• Lost income? Gone.
• College savings? Wiped out.

Your family could burn through that payout in months—not years.

2. It’s Not Portable—You Lose It When You Leave Your Job

Texas has a booming job market. People change employers often. But your coverage doesn’t follow you.

Once you leave your job—voluntarily or not—your life insurance usually ends, and you’re stuck starting from scratch.

If your health changes in the meantime, you could face higher premiums or even denial when trying to get a new policy later.

3. You Have No Control Over It

Your employer picks the carrier, the coverage amount, and the terms.

You can’t increase the benefit much. You can’t customize the riders. And you might not even know if it includes living benefits (most don’t).

Plus, group policies often go through renewal every year. The benefits can change—or disappear—without notice.

4. It Might Get Taxed

If your employer offers more than $50,000 in coverage and pays for it, the IRS considers that excess a taxable benefit.

So part of the “free” coverage you think you’re getting might come with a tax surprise.

5. It Doesn’t Account for the Real Cost of Living in Texas

Texas has a wide cost-of-living range. A family in Austin or Plano faces higher mortgage payments and daycare costs than someone in a smaller town.

But group policies don’t reflect your situation. They’re one-size-fits-all, and life doesn’t work that way.

The true cost of replacing income, covering debt, and giving your family time to recover is much higher than what an employer plan can handle alone.

What Smart Texans Are Doing Instead

Most people use employer coverage as a supplement, not a solution. Here's how Texans are building real protection:

✔ Buying Term Life Insurance

Affordable, flexible, and customizable. You can choose coverage that actually protects your family’s future—$250,000, $500,000, even $1 million—and it stays with you no matter where you work.

✔ Adding Living Benefits

These let you access part of your life insurance while you’re alive if you get seriously ill. Most workplace policies don’t include this—but personal plans often do.

✔ Locking in Rates While Healthy

The younger and healthier you are, the lower your premiums. Waiting until later in life—or after a diagnosis—can make it way more expensive or even impossible.

Real Example: Texas Mom With Employer Coverage

A 33-year-old single mom in Houston has $50,000 in life insurance through her job. She thinks she’s covered—until her HR rep reminds her it won’t follow her if she changes jobs.

She decides to get a $500,000 term policy for just $27/month. Now her daughter is protected no matter where she works—and she’s building real financial security.

That’s the power of taking control.

Final Word

Employer life insurance is a great perk—but it should never be your only plan.

If you live in Texas and you’re relying solely on what your job gives you, you’re putting your family at risk without realizing it.

I help Texans get personal coverage that sticks with them for the long haul. No pressure. No confusing language. Just honest advice from someone who knows how this works here in Texas.