How does extra work life insurance work?

I buy extra insurance. We get one times salary for free. I purchase an extra two times salary every year. When companies give you this option do they extend your existing coverage for another year, or do they start a new policy? You'd hope it's an extension, but I am not sure.
I was hoping for a general answer. There are three options:
1. It's always renewed.
2. It's always a new policy.
3. Sometimes it's renewed, sometimes it's a new policy.
If it's 3, what's the distribution like? 50-50? Are there circumstances that factor in?
I feel like it would draw suspicion

I was hoping for a general answer. There are three options:
1. It's always renewed.
2. It's always a new policy.
3. Sometimes it's renewed, sometimes it's a new policy.
If it's 3, what's the distribution like? 50-50? Are there circumstances that factor in?
I feel like it would draw suspicion to ask.

Other answer:

User:
We understand the question.
No one here knows if it's two policies or one (including you unless you have read the plan documents).
It does not matter if it is one plan or two.

You will have the employer portion until the company stops or changes this benefit.

The supplemental portion is valid for one year. On an annual basis when you re-elect benefits, you need to re-elect the supplemental life insurance also.
– Your company may have a passive enrollment = this means if you don't make changes the existing benefits stay in effect.

Purchasing work based life insurance is usually not the best option:
Why? Unless you die of a sudden illness or injury, you won't be employed when you die. instead you would have lost your job during your illness because you are unable to work. When you lose your job, in most instances, your life insurance can't be ported to an individual plan.

It's not "my" policy. It's your employer's policy, that you are covered under.
Most employer policies are renewed ever 3-5 years. But I can't imagine it ever impacting you. If you are asked how long you have been enrolled you would simply say "2 years", if you first enrolled in Jan 2014.

amy lynn:
My company has similar options. The company provides us with life insurance equal to one times our annual pay. Then we have the option to purchase more. I pick the option of 2X the annual pay in addition to the 1X that they provide.

That means that the person I have listed as my beneficiary will get 3X my annual pay in the event that I die while covered by the policy. The policy for 1X the annual pay is effective as long as I am employed with the company. I don't have to do anything to keep it. It is just always there. The additional coverage for 2X the annual pay is effective as long as I renew it during open enrollment for insurance that happens once every year. (my company includes all insurance policies in the open enrollment for medical insurance. If we want to make changes to any of our available insurance options, we would do so during the open enrollment period that happens during November)

As for them being one policy or two different policies, I am not sure. That would depend on exactly what your company has set up.

Basically, your extra coverage should renew once per year and be good for one year. The coverage the company offers should be constant.

EDIT TO ANSWER YOUR 3RD UPDATE: Only your company can answer the kind of question you are asking. We don't know if your company considers the policy brand new at every renewal or if they keep the running age from the original policy. In most cases, it won't matter and the policy would pay out the same either way. As long as the policy is active, the age of the policy shouldn't matter.

lucy:
http://www.investopedia.com/articles/per…

You need to read this article to see how it works with employer vs individual life insurance.

Employer free for your salary and many will offer up to 3 X your salary sounds great, since the cost is generally cheap, (but) the key is, in most cases (only) applies while working for (THIS) employer.

So, like me with one employer, when laid off, just like Cobra for health insurance, then (you) pay the full cost, and may be converted to an individual policy that you may not be able to afford. That was what poster Hunch "hinted" by getting sick, or an illness that may prevent you from working, and could lose this coverage.

Do you plan on working for this employer till you retire, or maybe getting another better job in the future? Most employers when you quit, laid off or retire, the benefits also stop. Gone are the days when you retired that the employer paid for the health insurance, a pension or anything else.

Insurance Pickle.com:
I think you're overthinking it. If you pick up the EXTRA 2X salary and they give you 1X salary, then if you die, your beneficiary gets 3X your salary. If your open enrollment is January 1, then what they give you and the extra that you buy (likely) runs from January 1 – December 31st. So, if you signed up for the extra coverage in Decmeber (for Jan 1 start date), and died December 31st, then you wouldn't get paid on the coverage that would have started the following day.

—-

You don't have a policy. Your EMPLOYER has a policy. It's as old as the day THEY purchased it. You are an insured on their policy. There are likely NO two-year provisions on your group policy. Suicide, which has a two-year look back, for example, on INDIVIDUAL policies, is generally not covered under group at all. That's why you don't have a policy. You have a certificate of coverage.

DON W:
Most work-supplied life insurance is automatically renewed term. That means that once you set it up, provided you pay your premiums on time, it stays in force while you stay employed at the company. What might change is that the premium increases as you get older–but that's usually not a major factor until you turn about 50.
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Casey Y:
Your policy is a one year term policy, that's how employer sponsored plans work in most cases. There is no second year of a policy.
tro:
it sounds to me like your company offers you a minimum coverage policy but you have a choice to pay for extra coverage meaning that instead of a $1K policy you buy one for $2K which means if you died your beneficiary would get $2K instead of $1K
the policy is for a year at a time, next year you again make another selection unless you let them know this is automatically renewable for your choice(maybe in subsequent years you might choose to get a greater policy)
curtisports2:
No and no. You are covered under a group policy, for as long as you are employed (and as long as the insurance plan remains in force).
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