Group Life Insurance vs Private Life Insurance
When it comes to life insurance, the biggest debate that ensues is whether a person should go for group life insurance or private life insurance.
- Group Life Insurance
- Private Life Insurance
When it comes to life insurance, the biggest debate that ensues is whether a person should go for group life insurance or private life insurance. In reality, this is more about whether a person should rely on the insurance provided by the employer or get themselves a personal life insurance plan as well. Both these insurance types are of their own individual standing when you consider the way each of them is used. To make sure both an individual and an employer who may read this makes the right decision, it is important to know how each of these types of life insurance work and what are their individual pros and cons.
Having that knowledge can definitely prove to be quite useful in decision making. As an individual, you may be able to decide whether or not it is worth getting a private policy for yourself, and as an employer, you can see what kind of benefits you could gain from introducing a group-based policy to your organization. Let us start with the first one, i.e. group life insurance.
Group Life Insurance
As the title suggests, this particular kind of life insurance is one where a single policy covers an entire group of people. It is quite uncommon for random people to get a group life insurance by coming together, so the most obvious and common scenario for its use is when an employer decides to provide a whole group of employees with a life insurance policy. The owner of this policy can either be a person, e.g. the owner of the company or even the company itself, covering all the people of the organization who are to be provided with this benefit. This type of benefit is typically provided as a part of the overall package of fringe benefits that the company provides to its employees.
The most salient feature of this type of policy is the significantly low cost that needs to be paid as premium for each individual. The large base of customers that the company provides ends up being a great reason for the insurance company to provide a lower price as an incentive to the employer. A pretty basic rule that stands here is that if you are being offered life insurance by your employer, you should definitely take it. And if you don’t have any personal coverage or it is not good enough, there is no reason why you wouldn’t accept such an offer! Even though the employer alone is buying the policy and they alone can make changes to it, being part of the group means all the participants receive a certificate that works as proof from the employee that he or she is part of the insurance policy.
Term coverage: While the coverage you get from your employer is free of cost for you, it is important to realize that it is actually a term life insurance. What that means is the employer is able to set the specific time period when the policy becomes no longer applicable for each employee. Typically this date is set to be the time of retirement for each employee or when the employment is terminated. Once the employee is out of the hands of your employer, it is no longer the responsibility of the employer to provide for his or her life insurance.
The amount of coverage that an employee gets from this policy in case of death during service is typically around 1-2 times the annual salary of the person being covered.
Since the group insurance is usually the decision of an employer to provide to their employees, it is only natural that the end of employment is the ending period for the insurance as well. There is always the option for a person to switch to private afterwards, but have never paid for their insurance before, a lot of people tend to not opt for it because of the high cost of private life policies. It can, however, be of interest to certain people who know they want the insurance and would not get it on the basis of them not being insurable for any number of reasons.
Getting insurance with your busy routine as an employer can be a big hassle, especially in the current corporate world, where everything is so fast-paced. Making time for a full insurance review can be tedious, time-consuming and cost you money as well. Having an online solution like Emma life insurance can be a big help in this regard. With the option to do the whole registration procedure completely online, the need to make time for a conventional policy buying process can easily be bypassed.
Private Life Insurance
When an individual decides to get insurance on their own, the policy they usually opt for is a private life policy. This particular policy is owned directly by the person being covered, and the payment is therefore also their own responsibility. No interference is done by the employer of that person, and in a lot of cases, individuals buying private life policies are elf employed. Getting coverage is directly linked to the ever lingering question; would your family survive if you, their sole provider, were to die tomorrow? A lot of people want to make sure they don't have to think about that question worryingly, so they opt to get themselves a life insurance package.
Private life insurance is a lot more expensive than group life policies because the insurance company is getting a much smaller investment to work with. In order to reach the investment and return goals that they set for themselves and the policyholder, they end up charging a higher amount of premium. On the other hand, however, the benefit belongs only to one person, i.e. the individual policyholder and they have complete autonomy to make any changes they want to their policy.
Private life insurance is pretty straight forward and simple; you apply for the policy, choose from the different options you have and finalize the type of policy you want, start paying the premium. What you do need to know in advance, however, is the two broader options that you can choose from and how each of them works.
- The first one is the TERM LIFE OPTION, and as far as any private, group or other types of life insurance are concerned, this is clearly the cheapest option to go for. The reason behind it is so cheap is that it only covers the person DURING the time period that the policy is active. Unlike other insurances, it does not have any benefit that can be acquired at the end of the term. Not having to pay any benefit means that the insurance company only has to worry about the mortality rates and the person’s own health condition.
This policy is mostly used by people who want to make sure that their employment period is covered for and they are expecting either a huge benefit at the time of retirement, or they feel they will be able to accumulate sufficient amount of money to last them by the time they retire from their job. This is the reason why the most common time when people choose to let the policy end is at the age of 60 or their firm's retirement age. However, it is important to know that you can still choose to continue coverage with a term life policy, and a lot of insurance companies allow it to go on for as long as 95 years of age!
- The second option is WHOLE LIFE insurance, which is the most conventional of all types of life insurance. As far as private life insurance is concerned, you will find this to be the default option presented by most insurance companies. Being a privately owned policy and capable of providing a cash benefit at either death or maturity, it is only natural that the price of this policy is the highest of all. Companies are promising you a guaranteed payout against your investment, and the small investment means they have very little money to invest further and earn profits. This option is often chosen by individuals who have amassed a certain amount of money and are looking to provide suitable coverage for their loved ones in case of their death, be it natural or accidental.
Long gone are the days when getting an insurance policy for yourself meant going through a never-ending and boring evaluation and approval process. Companies such as Emma life insurance have changed the landscape of the industry by providing the option to go through the whole process online. Now you could be sitting in your office, or relaxing on your couch at home, or perhaps enjoying a holiday in Ibiza. In a few clicks, you can go through the whole process and be done with it if you want. Whether you are an employer looking to provide a benefit to your employees or an individual looking for protection for your loved ones, you know the options you can go for now.