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Group vs. Individual Life Insurance: Which is Right for You?
This article compares group and individual life insurance, highlighting the pros and cons of each. It focuses on coverage, cost, and portability, helping readers make informed decisions about their life insurance needs.
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- Does employer life insurance build cash value?
- Most employer life insurance is term life insurance, which does not build cash value. Unlike permanent life insurance, term policies don't have a cash value component that you can borrow against or withdraw from.
- What happens to group life insurance when employment ends?
- Group life insurance is tied to employment and ends when you leave your job. While some policies allow conversion to individual plans, this often comes with higher rates. An individual life insurance policy remains in force regardless of employment status.
- Is employer-provided life insurance sufficient for most people?
- While employer-sponsored life insurance is better than nothing, it typically doesn't provide enough coverage to fully support your family. Experts recommend a policy that pays at least 10 times your annual income, whereas group policies usually pay one to two times your salary.
- What are the key features of employer-sponsored life insurance?
- Employer-sponsored life insurance is usually term life insurance, offered at no cost with no medical exam, and it typically terminates if you leave the company. The death benefit is often capped at one or two times your salary, but additional coverage may be available.
- How does the cost of supplemental life insurance compare to individual policies?
- Supplemental life insurance can be more expensive than individual policies, particularly for younger and healthier individuals. Older workers or those in poor health may find supplemental premiums lower than those on the open market.