Group Policies and Life Insurance

Group life or health insurance is a policy that covers a group of people under one policy. These policies are normally owned by the employers and offered to employees.  Enrolling in a group life insurance plan doesn’t usually involve a medical exam or a formal life insurance application and the rates tend to be pretty low.

Should Group Life Insurance be Your Primary Life Insurance?

Simply put…No.  Because the policy is not owned by the individual, there is very little control to increase the coverage or customize it in any way.  Also, when a person changes or losses a job the insurance is gone too.  This might leave a family is a tough spot, especially if the person in need of insurance is no longer insurable for medical reasons.  However, some group term insurance policies allow the option of converting to an individual policy if you leave your employer, but there is a time frame in which this conversion needs to happen.  It’s important to have your own individual life insurance which the group insurance may “top up” or compliment.

The Bottom Line:

Group insurance is a great way to have low cost insurance but it’s important to be mindful of a few things…

  • Is it less expensive than your own term policy?
  • When will the rates increase?
  • When can you covert it to your own personal policy?
  • Is the coverage guaranteed?

There are other considerations as well and it’s important to have a licensed advisor work with you personally to ensure that you have an assessment of your insurance needs and that they are addressed properly.

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