Why Should You Not Buy Insurance Through Your Employer If You Are Healthy?
If you're getting life insurance through your employer, chances are you're paying more than you should be. Maybe even twice as much! It makes sense to think that what you're getting through your employer should be less expensive than what you'd get on your own, and if your employer offers free insurance as part of your employee benefits package, you should definitely accept it. But while some benefits are less expensive when purchased as part of a larger group of people – like health, disability and long-term care insurance – that's not always the case with life insurance. Recent life insurance studies show that while the costs of individual term life policies have dropped dramatically over the last ten years, the average costs for group life coverage have stayed the same. So the coverage your employer is providing could actually be a lot more expensive than what you could get on your own. When your employer buys coverage, he or she is paying for a group of employees with a lot of different health and age factors. Some are young, some are old. Some smoke, some don't. Some take great care of themselves, and some could not care less about exercising or getting preventive care from their doctors. The premiums your employer is paying are based on the fact that, on average, your group may be a lot less healthy than you are! Individual policies are issued based on your health history and your age and your lifestyle and behaviors. And that means that you could have much lower premiums on your own when compared to the premiums for your group policy. Another factor to consider is that as you age, your group life insurance costs your employer more because you're moving from one age bracket (“under 35,” for example) to an older age bracket (“35 – 39”). In addition, your group life policy renews at least every three years, and often every two years or annually. Rates can be increased at each renewal period as well. But individual policies have fixed rates that stay the same over the coverage period. And while your employer-provided plan may be “portable,” meaning you can convert it to your own policy if you leave your job, many group plans don't have this feature. That means that you're without coverage of your own at a time when you may need it the most. Even with a portability feature, the policy may be too expensive to convert to an individual policy because you've grown older or developed some health conditions that you didn't have at an earlier age. The bottom line is this. If your employer provides you with free group life insurance coverage, you should definitely take it. But don't rely on it as your sole source of financial protection. It may be far too expensive or provide much less coverage than you should have when you need it the most. So, if you are in good health, don't pay more for your insurance to offset the cost of people who aren't in as great a shape. Please call one of our life insurance specialists at (866) 972-3262 to reduce your life insurance premium, or please complete life insurance quote request form now.