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Group life insurance is a wonderful benefit for an employer to offer, but it may not be enough life insurance to meet your needs. In 2015, The American Council of Life Insurers found that 44 percent of all life insurance policies are group life policies through employers and membership organizations like churches and clubs.
What You'll Learn
Group life policies
are great because they come at a low cost, but there are some downsides as well. Limited portability and little control over the future of the policy are just a couple of the major downsides of group life. Most group life policies through an employer do not go with you when you leave the company, so you could end up uninsured with only expensive options as a replacement.
Group policies often come with low values and limits, which could also ultimately come back to harm your loved ones. You shouldn't choose a policy just because it is cheap and easy, you should choose a policy that best meets the needs of your family. Do the math to determine what your family would need in the event of an unexpected loss of income and then figure out how group life fits into your overall insurance strategy.
Oftentimes, employers offer the ability to purchase additional life insurance on top of a basic group policy. This supplemental life insurance policy through your employer typically comes at a low cost and without a medical exam with options to choose a benefit level in multiples of your annual salary. Over a certain dollar level, the insurance company may still ask for a medical exam.
Deciding how to handle your life insurance both in and out of work can seem complicated, but once you understand the basics it begins to make more sense. This quiz will help you understand how well you know group and supplemental life insurance and tell you what you need to know to make a better decision.