If you’re lucky enough to work for a company that offers group benefits, you may have access to group life insurance. Group life insurance usually offers good coverage at a reasonable price but this it might not always be the best option.
Group Life Insurance
Less Flexibility: Most times these polices don’t offer as much flexibility to get additional coverage like accelerated death, child death, child term, or disability.
Limits of Coverage: Group Life Insurance may set a limit on the amount of coverage you can get. Different companies will measure coverage limits based upon different criteria. Typically, the coverage you may qualify for may be based upon your income. Some plans provide you the ability to add additional amounts of coverage.
Lack of Control: With your employer or group managing the policies, you could find yourself without coverage if the benefits get reduced or leave or loose your job. At times, employers may even decide to drop the group policy as a whole.
What is the Biggest Problem with Group Life Insurance?
Your policy could be gone after a life change, like leaving a job. A group policy typically stops providing coverage if you are fired, laid off or take another job. Some policies offer the option to convert to individual policies but this could increase the amount you pay.
Most people rely on group plans as their only life insurance policy. These policies are designed to be a supplemental life insurance policy. This means that it shouldn’t be the policy your rely on in the event of a death.
What is a better option?
If you are looking for a better option? Consider Term Life Insurance. Term Life Insurance offers a life insurance policy for a period of time known as a term. The term will last anywhere from 10-35 years on average. Once your term runs out, you will still have the ability to have coverage but your price may increase.With Term Coverage, it doesn’t rely on your job. You decide to move on, your insurance policy will still be there right by your side.
While Term is a great option you might also want to consider a Whole Life policy. A whole life insurance policy will typically cover you until death as long as your premiums are paid. Whole life also builds a cash value that will let you borrow against as a form of a loan. Universal Life insurance is also another form of permanent coverage that can stay with you for your entire life. As long as you fund the policy correctly and it preforms as expected. Universal life has more investment opportunity. You have an ability to make additional sums of money though investing the insurance company does, but you also run the chance of loosing or making less then what is expected due to market changes and performance.
Remember, Life insurance is serious business. Make sure you know all of the possible policy options and coverages before you make the final call. Having an agent who can work with multiple Insurance companies is a great start to finding the best coverage for you and your family.
This blog has been provided my Millennium Brokers.