Individual and Group Life Insurance Policies
Life insurance policies are sold either on individual basis or as group plan
Individual life policy
Insurance policies are tailor made for the individual needs of the customers. The right policy is zeroed in on based on the trustworthy of the company, the type of plan and benefits and other features associated with the policy. You have the liberty to purchase a policy from the insurance agent or company representative who deals with your home insurance, health, auto or travel insurance.
Most companies won’t offer any discount for doing business with a single entity but it is financially prudent to deal with a single insurance agent or company so that you make your business life easier and hassle free.
Individual life insurance policies are generally marketed through insurance agents or broker who will charge a commission for spending his precious time with you advising the type of insurance to be selected, its features, other facilitation process and other follow up work involved in purchasing and managing a product.
Certain states allow you to buy a policy from a savings bank. You have the liberty to select a company directly or through a “fee-only” financial advisor and that kind of policy is called "low load" or “no-load” policies because the sales commission is not added to the premium. Nevertheless, the insurance companies will covertly add the expenses involved in marketing and application processing and subsequent services into the premium and it is very difficult to find a no-load insurance policy online.
Group Insurance Policy
Most of the employers provide a policy that comes under the category of group insurance and you have the option to buy additional cover under the group policy. Being a member of any association like trade, college or staff group confers the opportunity to be eligible for the group plan. The group insurance plan has the following advantages over the individual policy and is described below.
You have a chance to pay a lower premium for a given death benefit because the employer either subsidizes it or the younger members in the group will pull down the average premium calculated for the elders.
- Group coverage does not mandate the health checkup of its members.
- The payment of premium is more or less assured because it is coupled with pay roll or credit card deduction and thereby nullifying the chance of missing the payment.
Generally, most of the type offered under the group plans are term insurance. However, in the event of yourself leaving your employer, you have the option to convert the term plan into a whole life insurance with the same company that provided the term plan. Under such circumstances, the premium may be paid directly to the company to keep your policy alive and it is more advantageous for elderly people or those with deteriorating health because the insured person is provided with a wonderful opportunity to be eligible for whole life insurance minus the health check up.
Credit life Insurance Policy
The institutions doing business with the credit card, mortgage and lending too offer loans and advances in case of death and the modality of the loan may be either
- As an integral part of loan without any additional charges and the cost of insurance is taken care of by the lender and is normally added with the interest rate or as some other service charges.
Or as an additional option with extra charge for the credit life coverage. In this case you have the liberty to reject the optional coverage if you have other form of insurance which may be individual or group plan that will take care of your outstanding balances in the event of your death. However, this option with additional charge is considered beneficial for those who are older than 50 and without any type of insurance since this type of insurance proves to be cheaper than other individual life insurance policies.