A few years ago, a life insurance milestone was hit as in force group life insurance surpassed individual life insurance. There is no doubt group coverage is convenient, offering the ability to get covered with little or no underwriting. However, there are many reasons to consider individual coverage in place of or in addition to group coverage. It often will be a lower cost, with better continuity features and the potential to have additional features and riders than what group coverage allows.
Group Life Insurance
Many believe purchasing group life insurance is like “buying in bulk.” Unless your employer is paying your premium, it will often be more economical to have individual life insurance. This is especially true the younger and healthier you are.
Group pricing has the younger and healthier subsidizing the less healthy and older group members. Group life is usually banded, and too often the math is not done to show how over time a stand-alone life insurance policy is often less costly. With individual coverage you don’t have to maintain employment to be covered. Group life insurance is generally inferior to individual life insurance, especially since it is often not portable when changing jobs.
Our Integrated Insight™ explains more and provides a case study comparison.
Association Life
Association life is very similar to group life insurance. Since it is not employer based, you can continue to hold a member certificate for coverage as long as you are a member.
Our newest Insurance Insight™ is a real-life case study that can help you educate your clients if they are considering coverage through an association.