Pharmacist Life Insurance: It Pays to Shop Around for Term Life Coverage

If you’re a young and healthy pharmacist, passing away prematurely might not be on your list of immediate concerns. But life insurance should be a part of every pharmacist’s financial plan when you have others depending on your income.

Like most professions, many pharmacists rely solely on their employer’s benefit package for life insurance. But these group benefit plans have a very limited death benefit, leaving your family with inadequate coverage.

Fortunately, getting a life insurance policy on your own doesn’t have to be complicated or expensive — contrary to popular belief due to insurance products, like whole life. Instead, term life insurance for pharmacists is very affordable with straightforward policy choices.

Read on to explore pharmacist life insurance options are available through employers versus on your own, how much coverage you actually need and the out-of-pocket costs to expect.

What life insurance do pharmacists carry?

With so much confusion surrounding life insurance, we wanted to get our hands on some real data to see where our readers and clients stand with their existing coverage.

Our 2022 Student Loan Planner Insurance Survey had just over 1,500 responses, 68 of which were pharmacists. Here’s what we learned about the pharmacist community and their understanding of life insurance.

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Pharmacists are ahead of the pack in terms of being insured

Our survey found that 75% of pharmacists think they need to buy term life insurance. This suggests pharmacists as a whole are grasping the importance of having term life insurance as part of their financial plan.

However, 54% have some level of term life through their employer, while 43% purchased their own policy outside of their workplace coverage.

Most pharmacists are relying on insurance coverage through their workplace or simply going without. Therefore, there’s still a large segment of pharmacists that either don’t have adequate coverage or are dangerously uninsured entirely.

Do pharmacists need life insurance?

If anyone will be impacted financially by your death, whether it's your spouse, partner or children, then you need adequate life insurance as a pharmacist.

People usually begin thinking about life insurance options after having a major life event, such as getting married or having a child.

But life insurance is also imperative in other overlooked situations. For example, if your spouse transitions to being a stay-at-home parent or into a more volatile income environment, like working as a freelancer. These scenarios could make it much harder to find immediate stable income in the event of your passing.

Special considerations for pharmacists buying term life insurance

When weighing options for life insurance, the job outlook for pharmacists should be a determining factor. Here’s why.

Unless your policy is portable, you’ll lose life insurance benefits upon leaving your existing job. With about 14,000 new pharmacy graduates each year, you might run into issues finding a future employer that provides adequate benefits given the influx of competition in the profession.

Some part-time pharmacy roles might not have life insurance benefits at all. At which point, it’ll cost more to get a term life policy of your own because you’ll be older.

The sooner you buy your own term life policy, the cheaper it’ll be.

Work hazards unique to pharmacists

One of the more scary circumstances pharmacists might have to face during their career (but hopefully not) is being targeted for robbery attempts. If you work in retail pharmacy, your workplace could become a target for its medications or for other goods sold within the store, potentially putting your life at risk in the process.

Additionally, pharmacists are at risk of exposure to contagious diseases when supplying medication to sick patients. We’ve seen this most recently with COVID-19, where pharmacists played a major role in helping their communities as frontline educators and responders.

These risks of death are rare, but real. In fact, it might be true that you’re more at risk driving to work every day than from an occupation-related hazard. Buying an inexpensive term life policy can mean the difference between your family struggling versus remaining stable in the event of your death.

The good news is that since the probability of death occurring is so low, you can protect against that event happening for a very low cost.

How much term life insurance do pharmacists need?

We’ll make it easy for you. Adequate term life insurance is the equivalent of at least 10-times your pharmacist salary. This will help ensure your family’s current obligations and future expenses are covered in your absence.

However, if you’re the breadwinner or if you have a large family, then we recommend buying 10- to 15-times your salary.

A good rule of thumb once you’ve established your salary multiplier is to round up to the nearest $500,000.

Basic formula: Salary x 10 = Minimum Coverage (rounded up to nearest 500K) = Policy Amount

To illustrate, let’s see how this could play out for the average pharmacist.

The median pharmacist salary is $128,710, according to the Bureau of Labor Statistics. Using this salary as our starting point, the average pharmacist needs at least $1.5 million in term life insurance.

For reference, here’s the breakdown: $128,710 x 10 = $1,287,100 (rounded up to nearest 500K) = $1.5 million

If you’re the breadwinner or have multiple dependents relying on you financially, you’ll need more than the average though.

Our survey determined that 66% of pharmacists are their household’s primary income earner. Adequate insurance coverage is a must for these breadwinning pharmacists that have families depending on their high income.

Therefore, primary income earners should aim for 10- to 15-times their salary. In which case, the average pharmacist needs $1.5 million to $2 million in term life coverage.

Overall, pharmacists are playing it smart by carrying some level of term life insurance. But many are relying on their employer for coverage, which means they might be underinsured or in danger of losing coverage if their employment status changes.

What life insurance benefits do pharmacists get through work?

Employer-provided term life is very limited compared to what pharmacists actually need. Most employer benefits use one to two times your salary to determine your death benefit. Alternatively, some cap the benefit at a low amount, such as $50,000.

For example, Walgreens provides company-paid term life equal to 1.5 times their pharmacists’ annual base salary. Using Glassdoor data for a Walgreens pharmacist, we can see the average base pay is $117,600. Therefore, term coverage is only for $176,400 at this level of pay.

Recall that our survey found that 54% of pharmacists have life insurance coverage through their employer. This further supports that pharmacists are severely underinsured and most don’t even realize it.

How much does term life insurance cost for pharmacists?

Term life premiums depend on a number of variables, including your age, gender, coverage amount, term length and medical history.

The average monthly life insurance premium for our surveyed pharmacists is $92. However, payments ranged from as low as $11 to about $200 per month.

Let’s run some sample scenarios to give you a better understanding of how affordable pharmacist term life insurance really is.

Pharmacy school graduates typically range from their mid-20s to early 30s, although some are in their 40s to 50s. For simplicity, we’ll compare costs of a 25-year-old versus a 35-year-old pharmacist.

Here’s what a 20-year term policy with $1.5 million of coverage could cost for a pharmacist in great health:

• 25-year-old female pharmacist – $31 per month
• 25-year-old male pharmacist – $42 per month
• 35-year-old female pharmacist – $40 per month
• 35-year-old male pharmacist – $46 per month

But what if you want $2 million in coverage because your family is primarily dependent on your income? An extra $500,000 of coverage for these example pharmacists will bump the premium up to:

• 25-year-old female pharmacist – $38 per month
• 25-year-old male pharmacist – $54 per month
• 35-year-old female pharmacist – $50 per month
• 35-year-old male pharmacist – $59 per month

So, about $10 more a month gets you added peace of mind and helps ensure your family is sufficiently taken care of if you’re no longer around to do it yourself.

If you’d like a free life insurance quote for your policy scenario, use the SLP insurance quote tool.

Top term life insurance options for pharmacists

If you have an employer-provided life insurance policy, it’s simply not enough given your high earnings. Explore your term life options by comparison shopping on your own.

If you’re part of a professional association, it might have an insurance partnership for members.

For example, the American Society of Health-System Pharmacists (ASHP) provides term life insurance options underwritten by New York Life. Policy options range from $25,000 up to $1 million. However, coverage isn’t available in all states.

Be aware that group benefit plans offered by associations generally have very few options and might not be the best rate available for your situation.

Using ASHP as an example, a 35-year-old non-smoking male wanting the maximum $1 million policy can expect to pay $0.34 per $1,000 in coverage each quarter. This comes out to $340 per quarter (or $113 monthly for comparison).

Now, recall our earlier example where a 35-year-old male pharmacist could only pay $59 per month for a $2 million policy. By blindly purchasing ASHP’s term life policy, this pharmacist could be paying nearly double for $1 million less in coverage. So, it clearly pays to shop around.

Don’t want to spend a lot of time comparing rates from individual life insurance companies? We can help. Compare over a dozen term life insurance options by starting our free life insurance quote process.