Voluntary Group Term Life Insurance Products; You Want Life Insurance Done This Way!
What is it? Voluntary Group Term Life Insurance is where the employees of a company can participate in the group life insurance plan by either paying the premium through a payroll deduction or being paid for by the employer.
In most situations these policies are paid for by the employee through a payroll deduction. These policies usually renew annually and each year will see a likely increase if no new, younger employees have been hired.
Rates are established by the risk of the business and subsequent risk of the employees to the insurance company (occupation).
Age: the age of the total number of employees will also be a determining factor to establish a rate baseline. Age is also what determines your rate if this is an employee paid benefit.
• The life insurance policy is typically guaranteed even to those employees in poor health.
• Often even terminal illness employees are eligible for coverage. (Not always)
• Very reasonable cost to the employee or employerWhy should you not participate in a voluntary group term life insurance plan?
Group term life insurance should not be your primary means of life insurance for your family or loved ones. The primary reason for this is that if you lose your job –you will lose this coverage.
Each year that passes your rates on life insurance are likely to increase. As life insurance rates are primarily determined by age, sex, and occupation.
If you work at a job for 10 years and then quit, get fired, or the business closes its doors, you are now out a life insurance policy and you are also 10 years older. Meaning that; it will be more expensive to get your life insurance coverage now than it was ten years earlier.
This is why I always tell young people to secure their life insurance while they are young. Get enough coverage to protect your family and make sure it is a stand-alone policy that will not be affected by the job that you hold; especially if the policy is tied and dependent upon your employer paying the monthly bill.
The Voluntary Group life insurance plan is a great idea and it makes sense to use these types of policies to provide some additional life insurance for your loved ones.
But don’t use them for your primary life insurance needs. The security of these policies is far too dependent on the relationship between you and your job, or your jobs security. The factors that can affect your position are outside of your control.
Getting an individually underwritten life insurance policy is probably not beyond your control. Although health problems may be a limiting factor for you here as well.
My best advice is to stay healthy. If you are not; get healthy (if possible). Read all that you can on how to eat better and take care of the one body that you have been given. And, in the meantime also keep your family well protected (with a stand-alone life insurance policy) should something unforeseen occur. For some additional coverage, the voluntary group term life insurance product as discussed here would make a ton of sense to supplement your life insurance coverage.
This way; you can rest easy. Knowing you have done all that you could to take care of your family or loved ones.
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• Advantages Of Voluntary Group Term Life Insurance
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