Acquiring an individual life insurance on top of your group life insurance coverage

Acquiring an individual life insurance on top of your group life insurance coverage

Some of us who have gained employment are lucky to have life insurance coverage included in our benefits package to help secure our loved ones during an untimely death. A life insurance policy through an employer group life plan has many advantages, but in most cases, leaves you with room to enhance coverage, depending on your economic need. We often neglect our personal obligation to take a long hard look at the details of our life insurance policy to ensure that what we are being offered through our group life plan will be adequate to meet financial obligations and long-term needs of those we will leave behind.

Group life insurance, which is also known as employer-provided life insurance, is an inexpensive life insurance coverage option. In most cases, employers make the same level of coverage available to their qualifying employees and pay a portion of the premiums. However, a life insurance policy through an employer sponsored plan will technically belong to the employer, and coverage ends when employment is terminated.

Considering that a group life insurance plan has limitations, it is wise to consider investing in an individual life insurance policy. Let us look at the three reasons why you should consider purchasing an individual policy on top of what you already have through your group life plan:

1. Employer-provided life insurance coverage may not be adequate for the needs of your family (your beneficiaries) and your estate when you pass.

If you are single and with minimal or no debt, you may not feel the need to acquire a life insurance policy or enhance coverage— until your circumstances change. These circumstances could mean marriage, children, caring for an elderly person, and dependent guardianship. Circumstances and needs vary, so it important to have a thorough understanding of your current financial standing in the event of a financial loss—current and long-term debts, college fund needs, estimated funeral costs, medical expenses, and others to help determine adequate investment levels for an individual life insurance product.

2. A group life insurance plan from your job may be more affordable, but coverage and contribution levels may change at any time and may be lost when employment is terminated.

Unlike a group life plan, an individual life policy is owned by the individual policyholder who also dictates coverage and product and will own the policy even after losing or changing jobs.

However, there are key advantages to group life plans. For example, guaranteed issue of a life policy without taking a medical examination or completing a medical questionnaire. And because you are purchasing a plan through your employer, you will naturally be taking advantage of plan discounts, especially if there is a large volume of members in the group.

3. The younger you are, the more affordable your premiums will be when acquiring an individual life insurance policy.

If you want to get more bang for your buck, secure an individual life insurance policy when you are still young, not later. Even if you are not married and without children now, future life changes will still require the same premium protection. Acquiring life coverage when you are young can save you a ton of money in the long run and it will also give you the ability to afford enhanced coverage.

It is best to meet with a life agent who can help with future planning to determine the best approach. Many things will be factored in such as future home ownership, children, college funds, etc. They will also offer term and whole life coverage options and work with you with a face amount and program that will suit you best.

To learn more about individual and group life insurance, visit Pacifica Insurance Underwriters, Inc. (PIUI) in Susupe during normal business hours, Monday-Friday, from 8am to 5pm and ask for either of their two life agents—Jessica Sablan (jessica@pacificains.com) or Francine Camacho (francine@pacificains.com). You may also log on to www.pacificains.com/life for more information. PIUI is a general agent for Pacific Guardian Life and is celebrating 50 years of business in the CNMI. (PR)