Group Life Insurance Versus Individual Life Insurance

Group Life Insurance provides coverage to plan members of an employee benefit plan, whereas Individual Life Insurance is taken out on an individual basis and applicants are not required to be part of a company medical plan. The following is a summary of the pros and cons of each plan:

Group Life Insurance Pros:
1. The employee is usually covered for a basic amount, i.e. one or two times their salary as part of their company benefit plan.
2. There are no medical requirements for basic group life coverage.
3. Optional group life coverage can often be obtained with minimum medical requirements, but there are maximums on the amount of coverage that the employee can obtain.

Group Life Insurance Cons:
1. The coverage ends when the employee leaves the company.
2. Coverage can be converted to an individual plan upon termination or retirement, but usually at a much higher premium than an equivalent individual life plan.

Individual Life Insurance Pros:
1. The insured can choose between a term or a permanent policy.
2. Preferred rates are available to applicants in excellent health with excellent family health history.
3. Individual life insurance offers much higher benefit face amounts than group life policies.

Individual Life Insurance Cons:
1. The applicant must medically qualify for an individual life insurance policy.
2. Depending on the applicant’s lifestyle or travel plans, the policy may include certain exclusions.

For more details on group life coverage, please visit our Group Benefits Online Quote Page or for details on our individual policies, you can contact us at 1-866-899-4849 or visit our  Individual Insurance Instant Quote Calculator.

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  • Ronnie Harper
    July 2, 2013 at 1:15 am

    Is there a limit on how much life insurance I can have. I have a pretty big group policy but just had my third child so I would like to investigate some additional life ins. Thanks

    • LSM Insurance
      July 2, 2013 at 7:51 am

      Thanks Ronnie and congratulations. Yes insurance companies do have a cap on how much life insurance they will underwrite based on your income, debt, needs and other policies in place.

      The cap changes from company to company but a ballpark is 20 times your annual income.