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Life Insurance
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Inside this Article
Life
Insurance Group Policy
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You
might have life insurance automatically
from your employer; many large companies do this.
Your employer also might offer you the chance to
buy additional life insurance under a group
policy. And you might be eligible to buy life
insurance under a group policy from a
union or trade association or other group you
belong to (such as a college alumni association or
an automobile club).
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Compared
to buying an individual life insurance policy,
there are several advantages to buying life
insurance under a group policy:
- Group purchase can
sometimes offer you a lower rate for a given death
benefit either because the employer or other group
sponsor subsidizes the premium or because the
rates are averages weighted by people younger than
you.
- There are virtually
no health qualifications for getting the group
coverage.
- Premium payment is
usually by payroll deduction (for employer-based
group coverage) or linked with other payments
(e.g., credit card bills), lowering the chance of
missing a payment.
Most employer group plans
are term insurance, but if you leave that employer
your state may require that you be allowed to convert
the policy to a form of whole life insurance
with the same insurance company that provides the
group life insurance. You would then pay
premiums directly to the company and keep the
insurance in force. This can be an advantage if you
are older, or have experienced deteriorating health,
as it gives you the opportunity to qualify for whole life
insurance without having a medical exam.
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