• image
  • image
  • image
Previous Next

Should I get Group Life Insurance or Term Life Insurance? The Underwriting Process

To answer this question, we first need to explain the difference between Group Life Insurance and Term Life Insurance.

Group Life is a policy taken on a group of people, usually this is composed of people who work for the same company or institution.  A group policy allows everybody in the company (Group) to purchase a limited amount of insurance based on a multiple of their annual income. So the group is underwritten [1] as opposed to the individual.  When a group is underwritten, this takes into account that within the group there will be healthy and unhealthy employees.  Therefore the rates you will pay for you life insurance will not be the best you can get if you went on your own.  They will be priced to account for both healthy and unhealthy employees.

Individual Term Life Insurance is an underwritten solely on the life of the person who is applying for insurance.  Therefore if you are healthy and have no underwriting issues it’s to your advantage to see if you can get much better rate by having your own individual policy rather then paying into a group policy.

When a healthy individual takes part in a group policy they subsidize those who are less healthy.  Their premium dollars offset the higher rates of those how would have to pay more for life insurance if they were to go off on their own.  Therefore if you spend the time to compare what you are paying in your group policy and how much the same amount would cost you as an individual you might be amazed at the difference.

Many people find they can literally double the amount of coverage for the same price as they are paying for a group policy.  Let one of our account executives at MyTerm.com review your policy and see what the advantages might be for you today.


[1] Underwriting is the process when all the factors such as age, health conditions, and environment are evaluated to determine the rate of coverage charged to a group or an individual.  The person who determines this rate is an underwriter.