You have a lot of choices when it comes to life insurance, especially with SDPEBA. We offer hundreds of unique plans that are tailored to your lifestyle. On top of choosing between universal, whole, or term life insurance, you’ll also have to decide whether you’re interested in group or individual life insurance.
The main difference between the two is how rates are calculated. Group life insurance is based on your age and everyone else signed up for that plan, while individual life insurance is just based on you. The reason these prices vary so drastically is because with an individual life insurance plan, agencies can easily tailor your plan to you and your health. With a group plan, there are more variables for the company to consider and thus have to price it accordingly.
Which Plan is right for Me?
If there was an exact right answer, this article would be much shorter, but for once, this isn’t entirely that complicated.
The best way to figure out which plan is better is to compare rates. You might be saying “duh” right about now but, trust me, there’s more to it. Since you’ll likely be paying this rate for the rest of your life, that means the rates will change over time too. So, even if both plans cost you $30 a month, you can’t just flip a coin and call it in the air.
Usually, a group plan’s rate will increase anywhere between 40% to 60% every five years. Whereas an individual plan will offer a fixed rate or a rate that better reflects your health. Meaning, a healthy person will see their rates increase less (possibly not at all) as they get older.
Meaning, the choice between a group and an individual plan relies a lot on whether you’re healthy or not! There’s, of course, more to consider because nothing is ever quite that simple.
The Case for Group Life Insurance
The above reasons take precedent, but there is a case to be made for getting group life insurance—and that is that it is often convenient.
Now, I’m not advocating for laziness, life insurance is one of those things that’s worth the extra effort, but group life insurance is often presented to you on a silver platter and doesn’t usually require a medical exam (it varies plan by plan, you often need to fill out a detailed questionnaire).
So, if you’re a high-powered business executive, or chronically ill, you might want to sign up for one! Just make sure you do the math and consider the compounding cost.