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Term insurance has two main types: individual and group. But how do you decide which one is appropriate for you? Let’s break it down a little and do some thinking here.
Understanding Group Term Insurance
So, what exactly is group term insurance? It’s kind of like being a part of a club. It is offered by your employer or a group that you belong to, or it is offered by a professional association to all members. You pay, and in return, there is coverage.
In this respect, group insurance could be a cost-effective, bulk-purchase way of obtaining insurance for each member.
Understanding Individual Term Life Insurance
Individual term insurance is exactly what it sounds like—just for you. You can buy it directly from an insurance company, where you determine the amount of coverage and the length of time. It’s like walking into an outlet and choosing exactly what you want.
Consider Your Needs
First, think of what is needed. If you are young and in good health, then perhaps there may not be any reason for large coverage. Group-term insurance through your job might just give some edge to that worry without being too costly.
However, if you have a family to take care of or a mortgage to pay off, you may want to buy term insurance in your name to ensure that your dependents are provided for in case something untoward happens to you.
Think About Cost
Group term insurance is far more economical than individual term insurance because, in this case, the risk gets spread out to include all members belonging to the group. But keep in mind group insurance is associated with membership in a certain group. If you happen to change your place of work or leave that group, that insurance plan might not be available.
But of course, individual term insurance is even more flexible, only not exactly cheap – especially once the advanced years settle in.
Customization Options
Individual term insurance provides one with far much control over the coverage. The option of how much coverage is needed and for how long the coverage should last can only be an individual’s decision. In group-term insurance, one is only bound by the number of options the group might provide.
Consider Stability
After all, consider your stability. If you think you will stay with your job or group for a good amount of time, group term life may be just perfect for you.
But if you think you may have to move jobs or groups and are insecure about your future coverage, then individual term insurance may be your better alternative as it goes wherever you go.
Conclusion
The only real choice between group and individual term insurance would be based on needs, cost, and possibly customization and stability of the insurance. If you are young and healthy but want to get some cheap type of coverage, then group term insurance may be the way to go.
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But should you need coverage against future circumstances with more specified needs or with the desire to get more flexibility, you may opt to consider individual term insurance instead. So, think and look for the best fit for you. In the following steps, if you go for deciding your own situation, you will be able to come up with an informed decision as to whether group or individual term insurance is the best fit for you and your loved ones.
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