Apr 18
Is supplemental group life insurance a good deal?
First, let’s look at the differences between supplemental group life insurance and term life insurance.
Supplemental Group Life Insurance
- Usually purchased through your employer on a voluntary basis
- Coverage is usually more expensive
- Death benefit can vary and is usually not as much as you need
- Most policies are “non-portable” meaning if you leave your company, your coverage ends
- Premiums usuallly raise every five years according to the “age-band” you fall into
- If you have poor health, no problem – there is no exam needed to qualify
Individual Term Life Insurance
- Individually underwritten – you must take a medical exam to qualify
- No limit on death benefit
- Coverage usually cheaper than supplemental group life depending on health and lifestyle
- Premiums remain level for entire length of the policy
- If you leave your job, you’ll still have life insurance
To answer the question, supplemental group life insurance could be a good deal if you’re unhealthy, but it can be a really bad deal if you’re healthy.
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