Comparing Small Group and Individual Life By Dennis Jarvis At Isnare.com Ezine Articles

You just get a new job and you're starting to go through the various options offered to you as benefits. You go through the packet step by step...parking, medical insurance, dental insurance, vision insurance (nice benefit package!), and...life insurance. You may already have some term life insurance so what should you do? Let's look at comparing life insurance offered by an employer and individual term life.

There's a lot to consider here. First, some key difference between Group sponsored life insurance and Individual term life. Let's first look at the group (employer sponsored) side. For like kinds of life insurance (say term and term), the cost for group may be less expensive. This occurs for two reasons. First, group rates tend to be better since there is a larger risk pool (the company versus just you) to spread the risk among. This is especially true for very large companies or government offered plans (say through a government plan). The other factor is that your company may pay a portion or all of the life premium. This can have a big impact depending on the type of coverage. You may have limited options in terms of how much coverage you can purchase and the life insurance may be contingent on employment. This means that if you leave the company or lose your job, the life insurance might end. This is critical and will impact our discussion later regarding your own individual life insurance policy.

One of the biggest advantages to Group sponsored life insurance is that it may be guarantee issued. This means you can qualify regardless of health or with a limited health questionnaire and/or underwriting. If you have health issues and are unable to qualify for standard term life insurance, group may be your only option if it's offered. One last key issue is the type of life insurance that is offered. If there's only whole life insurance offered through your employer and you are paying part or all of the premium, the decision becomes even more complicated and you should probably touch base with us as licensed life insurance agents to go over your options.

Now let's look at individual term life insurance plans such as those you would quote on this site. As mentioned above, if you have more serious health issues, this option may not be available. That makes the decision pretty easy. If you can qualify for individual term life, you then want to look at cost. Is the employer contributing to your life insurance rate? Is it term or whole life that is offered? Is the amount offered large enough to handle your life insurance needs? We are somewhat analyzing individual term life based on what group life can or cannot do. The big advantage, especially in today's world where people change jobs often, is the fact that individual term life is not contingent on your employment. You can continue this coverage as long as you pay the premium...regardless of your job.

There are many variables here and it's best to contact us as licensed term life insurance agents. It rarely makes sense to cancel existing term life insurance for group since group might be contingent on employment. Your existing life insurance rate is based on the age when you first enrolled and you would pay more to re-enroll assuming you qualify based on health. Before you decide one or the other, make sure to let us help you based on our experience.

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