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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