Is group term life insurance coverage affordable?


Essentially, group life insurance is considered affordable, since it is provided as a "bonus" by employers to their employees at little or no cost.

However, those people looking for guaranteed adequate protection for their families cannot afford to rely on the group term life insurance they receive at work alone.

Things to Consider with Group Life Insurance

Free group life insurance sounds very tempting but bear in mind that the coverage is usually far from adequate in meeting the insurance needs of the average American family. While a homestead typically needs a policy amounting to eight to ten times the breadwinner's annual income, employers only provide one or two times one's income in life insurance. This calls for the necessity to combine group life insurance with another type of individual life insurance, in order to provide sufficient coverage for your family.

Living in the conditions of a dynamic workforce market, it is very unlikely that one will stay with the same employer for life. Group life coverage has one major drawback: it is not portable, i.e. once you leave the company you lose all coverage under the group policy. Some employers offer extra coverage which you can purchase and keep even after you leave the job. Still, you can find a much better deal if you look for an individual life insurance quote.

If you are in good health, you can save a lot of money looking for an individual life insurance policy. Group life insurance policies won't give you credit for your good health, since risk is estimated not on the basis of individual health conditions, but considering the conditions of the group as a whole. As health conditions in a group vary significantly, life insurance prices are likely to go up. This way, healthy people end up paying for their fellow-employees' poor health. Conversely, people in poor health, who typically would not qualify for a life policy on their own, will benefit the most from group life insurance.

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