When considering optional group insurance it is important you consider all your options. For many, the appeal of group coverage is that not only could it supplement their already existing life insurance, but that it is also better value. Unfortunately, in many cases, this just isn’t true. For those looking for additional coverage, a smarter option (dollar to dollar) could be found with term life insurance. For anyone considering optional group coverage, it is important that you consider some of the major differences.
One of the key differences is the length of time you can get a fixed rate with group coverage. Since group coverage only offers increments of 5 years, your rates are subject to increase at the end of this period. Compared a standard term policy, which offers fixed rates for 10, 20 or even 30 years – meaning you have guaranteed coverage at a fixed rate for significantly longer terms.
Another thing to consider with group life policies is that they are “group” polices. This may sound obvious, but, compared to a term life insurance policy which is owned by you, the implications can be huge. For one, the group policy (and your coverage) can be eliminated due to factors beyond your control. Unlike a personal term life insurance policy which guarantees coverage for the length of your term (providing you live up to your end) and lays out any changes in your contract, a group policy can actually be eliminated based on the groups claim history. Basically it means that although you may never dream of taking advantage of your insurance, if the group at large has been and the insurance company decides it’s just too big a risk to continue doing business, then can withdraw the coverage and contract, leaving you without protection.
Extending on the fact you don’t actually own your insurance is the fact group insurance is insuring a much larger set of people. Now this may be to your advantage – if you’re on the top of the bell-curve or slipping down the unhealthy side, but if you’re healthier than the average person you may be missing out on preferred rates. Essentially, preferred rates means that the insurance company sees insuring you as less of a risk, so you’re not going to pay as much in premiums. These savings, multiplied over the entire length of your policy can definintely add up. With group life policies, preferred rates aren’t an option because the insurance company is simply looking at the average.
As with any life insurance policy – group, term, whole life insurance, or other – it is always important to speak with a professional. For some, group coverage can be a wise decision, but not necessarily for everyone. That’s why it’s important to speak with a professional life insurance advisor so you know your options. Request a free personalized quote from LifeCover today and speak with a licensed advisor from your area. We can help you get the coverage you deserve at a fair price. That’s how we make it easy.