Individual vs. Group Life Insurance: Which is Best For You?

When it comes to a life insurance policy, you have a lot of options. Your employer might even offer group life insurance as part of your benefits package, which can seem like an easy choice for protecting your family. But while group life insurance can offer you and your family affordable financial protection, in many cases, it doesn’t offer enough coverage. If you’re deciding on whether you should invest in an individual life insurance policy or stick with a group policy, you might want to consider both. Here’s why.

Group Life Insurancegroup of people with a magnifying glass over a few

Group life insurance offers coverage as part of a group through your employer, or through an association, union, or other organization. There are generally two types of group life insurance:

  1. Basic group life insurance- This is a small life insurance policy that your employer can offer you as part of your benefits package. It usually comes in a predetermined amount, such as a multiplier of your annual salary.
  2. Supplemental group life insurance– This allows you to buy life insurance coverage up to three or four times your annual salary, but you will need to answer some health questions during the application process. 

Group life insurance is a good option, and is popular, mainly because it’s an easy option: with this type of policy, your employer has already done the research for you. Not only that, but these policies tend to be affordable, so they are a good choice for people on a budget. But you do need to be aware of the drawbacks of group life insurance, including:

  • Benefit amounts tend to be lower than with other types of policies
  • You have very little ability to customize your policy
  • In most cases, you will not be able to take your policy with you if you leave your job

Individual Life Insurance

Individual life insurance is life insurance that you purchase on your own. It is different from group life insurance in that it allows you to make changes to your policy, and customize it. The other benefits of individual life insurance include: 

  • Access to more types of policies, which will make it easier to find one that meets your needs and budget. 
  • Higher benefit amounts for your family.
  • You will never have to worry about losing your policy when you leave your current job.

The one thing to be aware of is that individual life insurance policies tend to be more expensive than group life policies because you don’t have a group of people paying into the premium pool. But that doesn’t mean that you can’t find a great affordable individual life insurance policy! 

Group or Individual Life Insurance?

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Now that we’ve laid out the general pros and cons of both group and individual life insurance, you might still be wondering which is right for you. The answer could be that having both is the best option for you and your family. Your group policy might not offer enough coverage, but it might be very inexpensive, so you could treat it as a supplemental policy, and then also purchase an individual policy that will fully protect your family.  

Need Help?

When considering your options for life insurance, you will need to figure out how much coverage your family needs, how much your group life insurance policy will provide, how much you can afford, and how long you need the coverage. Speak to your benefits manager at work, and work with a life insurance agent to find an individual policy that works for you.

Your family has financial obligations that will not go away when you are gone; they will need your help more than ever with their expenses, and the last thing you want them to worry about is money while they are grieving. There are many great affordable life insurance options to choose from that will provide enough money for your family, for a low monthly price. The best way to find the right life insurance policy for you and your specific needs is by working with an agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

About The Author: Cassandra Love

With over a decade of helpful content experience Cassandra has dedicated her career to making sure people have access to relevant, easy to understand, and valuable information. After realizing a huge knowledge gap Cassandra spent years researching and working with health insurance companies to create accessible guides and articles to walk anyone through every aspect of the insurance process.
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