An individually-owned life insurance policy means you own the policy outright. It’s completely separate from your employer so it goes with you wherever you go.
If your employer cancels your group coverage benefits, your individually-owned life insurance policy is not affected. If you leave your job voluntarily or are terminated, your individually-owned life insurance policy is not affected.
With this term life insurance coverage, you choose the coverage amount and how long the coverage lasts. Term lengths range from 10 to 40 years depending on your age.
You do not need to renew year after year as you would with voluntary life insurance coverage. As long as you pay the premiums, the coverage continues until your chosen term length expires.
An individually-owned term life insurance policy is the best type of life insurance for most individuals looking to supplement their group life insurance coverage.
If you’re relatively healthy, a term life insurance policy will often be more affordable over the course of the policy than a voluntary life insurance policy.
Why? Term life insurance is individually underwritten to you, the insured, whereas voluntary life insurance pricing is based on averages in a group.
With coverage offered through your employer, if you’re healthier than the average group of individuals, you may end up paying more than you would with an individually-owned term life insurance policy.
On top of this, term life insurance premiums are fixed. This means when you buy the policy, your premium won’t increase the entirety of the term. Your age and health won’t affect your premiums. Voluntary life insurance premiums are not fixed. They will increase as you age.
Consider the table below for a better idea of the cost of term life insurance versus voluntary life insurance.
