Group Life Insurance?
Group benefit plans treat all employees the same, regardless of individual needs. Coverage amounts may be determined by income, but a single worker with the same earnings will get the same benefit as a married worker with children. Many plans offer the option of additional coverage for extra premium. However, the total amount of coverage available is limited and may not fully meet your needs.
A group employee insurance plan is a contract between an employer, union or association and an insurance company to provide protection for the employees or members. Because he is not a party to the contract, You have no rights under the plan other than to name a beneficiary.The group plan can be changed at any time without your approval. Your employer may decide to switch insurance companies, reduce coverage or cancel it completely. Even though he is the insured individual, You have no voice in these decisions. Group insurance is year-to-year coverage. The insurance company can change the policy on the renewal date. It can increase the premiums, reduce the coverage or refuse to renew altogether. The group insurance is low cost for two reasons. First, it covers you while you are least likely to die, while you are still able to work. Second, your employer pays a good portion of the premium.
When you quits, gets fired or retires, you will lose your coverage. Some companies, associations or unions may continue a portion of the benefits for a short time after retirement. He will get an opportunity to convert his life insurance coverage to a personal plan, but his options will be limited and can be very expensive. However, it is unlikely that you will feel you can afford it if you have just left your job.
It is recommended to obtain personal life insurance now and coordinate your total coverage needs with your group plan. You will have the option of increasing or decreasing coverage as you sees fit. You can use it as collateral for a loan, perhaps to start a business of his own. With the purchase of a permanent life insurance policy, You can use the cash build-up as an emergency fund in the future. In short, You will have a policy that he controls and will be in effect whether You are working or not.
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