Why Group Life Insurance Costs Less?

Why Group Life Insurance Costs Less

Purchasing life insurance tends to be a good financial decision. It allows you to obtain financial protection for your family. If something happens to you, you know your family gets funds to help them to meet their needs. Yet, there are various forms of life insurance available. One term you may learn about is group life insurance. Is this the right type of coverage for you?  

There are several things to consider. Here is what you have to know first. 

What Is It? 

Group life insurance is just what it sounds like. A group of people purchase a life insurance policy together. It is common, for example, for an employer to purchase basic life insurance plans for a group of employees together. Some associations can do this for members, too. You can also find groups online to buy through if you fit their requirements. Buying like this can reduce your costs in some cases. 

Group insurance tends to be more affordable because there is less risk to the company offering that coverage. It is less likely that 50 people will need those policies paid out during their lifetime. As a result, the company reduces the costs.  

Because there is less risk as a whole, the policies cost less. They also offer limited coverage and features. This usually reduces not only payouts, but also operating costs. Those savings pass down to the customer. 

What You Should Do 

Take a look at any group life insurance offered to you. Does it offer the amount and type of protection you need? Even if not, you may still want to purchase it.  

You can obtain additional life insurance coverage beyond this as well. It is important that all insurance you own fit your unique needs. Your agent can help ensure this is possible. A customized plan with group and individual life insurance may be best.