Do I Need Individual Life Insurance Policy If I’m Covered Under Group Life Insurance


The best advantage of having a full-time job is that you get many benefits and the one among them is getting an insurance cover. There are many benefits of getting this insurance as this is provided by the company and will definitely have an edge over separate plans.

Mentioned below are some of the benefits:

1. Ease

Getting a life insurance through your employer is very easy and since it is being purchased in bulk there are no hard and fast rules. This seems to be easy for people who have pre-existing diseases and find it difficult to get insurance outside. The premium paid towards these insurance is very less as compared to the ones available in the market.

2. Low Cost

Life insurance provided by the companies are extremely low cost and are often free. You even get an option to buy this insurance for your parents and can even get riders by paying some additional charges. The cost for these plans is very low as these are bought in bulk for the company and the individual cost is very low.

3. Convenient

It’s very easy to get enrolled into life insurance through employer and you need not even pay money separately. If required it will be deducted from your salary.

The above mentioned are only some advantages but in order to make a calculative decision, it is equally important to consider the negatives as well

The idea behind buying any life insurance plan is to have a protection cover. The insurance you hold should solve the purpose. With group insurance policy, it is mostly set by the employer and is usually 2 times of your annual salary. The primary purpose of life insurance is to provide protection to you and your family in the event of your death.

Disadvantages Of Group Life Insurance Policy

It is good to have a group life insurance policy but you should not only rely upon it alone, as there are some disadvantages as well:

1. You Are Only Covered As Long As You Are Employed

The life insurance provided by your employer is only valid as long as you are working for the company. The moment you leave the organization the policy is cancelled and you cannot take it along.

2. Coverage Is Valid Until A Specific Age

The insurance policy provided by your employer is valid only until a specific age and will not last post your retirement. This is the age when you need the insurance the most.

3. Coverage Can Be Terminated Any Time

The insurance policy provided by your employer can be terminated or altered at any tie and that too without your consent as the contract is not with you but with your company. You will not have a say in it.

4. Limited Options

The coverage in group policies is limited and restricted. You cannot have them modified or customised as per your needs and you will have to even be able to buy riders additionally.

Why is it Important to Buy a Separate Life Insurance Policy

In addition to holding a group insurance policy, it is extremely important to have a separate policy to cater to your needs. The other policy should be tailored and should serve all your purposes.

The individual life insurance plans offers you added benefits and can be customised as per your needs. The separate plans will serve you the purpose you are actually buying it for and will accommodate all your needs. These plans can also be customised and you can even buy additional riders to get extra covers.

This will not only ensure you are in safe hands but will also make sure your dependents are safeguarded against all odds and they need not be dependent upon your employer.

How to Make the Right Decision

There is no denial in having the group insurance which is basically free of cost and provides you good benefits and covers.

Along with this you can also compare other plans available in the market and find out what you can buy along with your group insurance policy. It is always better to buy a separate policy on your own and not through your employer as you may not wish to divulge some personal information to them. Even if the individual policy costs you more, it is beneficial to buy it as this gives you expanded cover and can be convenient in many cases.

In cases where the number of dependents are more, it is better to hold a diversified portfolio and have mixed policies. Some of the dependents can be supplemented through your group policy and others can be accommodated with separate polices clubbed with your individual life insurance plan.

In case you have a fear that you may not be eligible for a separate plan and cannot get the desired cover basis your health issues medical complications, it is always a good idea to get a health cover through your employers. Just be sure of the limitations and have a second option in place for some unwanted circumstances.

Sometimes even when you leave the organization you are working for, you get a choice to convert your group insurance policy to an individual policy. Mostly people don’t choose this as their premiums for such conversions are way higher than the ones that you pay for separate individual policies. But what you miss out here is, these conversions are extremely helpful in cases where you are not sure about your health complications and can be denied a policy given some pre-existing diseases.

For such individuals, paying these extra premiums will be beneficial than not having any policy at all and paying much more at the time of any medical emergency. It is always a good idea to have an individual policy in place and have a group policy as a supplement policy to serve the purpose.

Always analyse your needs and make sure the policy that you are choosing is at par with all your needs.

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