Individual life insurance policy may be the anchor of your financial planning—Healthy Employee take note.
PISCATAWAY, NJ—07/15/09—Employees often think that group life insurance offered through their employers is cheaper than purchasing individual term life insurance plans, but a person of good health could save up to 50% by switching to an individual policy. BeamaLife addresses this often confusing issue.
Group life insurance is based on the general statistics of the overall employment pool rather than an individual’s personal health. It averages all the information together and creates one large price that gets evenly distributed throughout the pool. As a result of everyone being combined, regardless of key factors like health history, family history, height & weight, personal driving records, etc. an individual in good health can find their self paying more to cover their peers in poor health, while those unhealthy individuals find themselves paying less.
Neil Jesani, CEO of www.BeamaLifeInsurance.com , said about the discrepancy, “We saw these numbers and were astonished that an individual could pay nearly half the price by switching from his employer’s group insurance to individual insurance. However, it makes sense that this would be the case if you are in good health because in group life insurance you are paying for the strongest and weakest links alike.”
Based on typical hospital group coverage numbers, a non-smoker and heavy smoker at the age of 30 would equally pay $12.00 per month for $100,000 coverage. Whereas if that non-smoker in good health switched to individual life insurance coverage, their payments would be cut almost in half to only $6.96 per month because their individual life insurance only assesses them rather than everyone alike. Furthermore, the individual payments only increase every 10 years as opposed to five, meaning the healthy employee would pay $6.96 until they turned 40 when it would change to $8.27 versus a raised premium at 35 to $16.00 and again at 40 to $23.00 for the unhealthy employee.
In the past decade the average premiums for individual term life insurance dropped nearly 40% while group term life insurance premiums remained virtually unchanged.
“Unless their employer is providing free life insurance, there is no reason why a healthy employee should buy supplemental term life insurance from work place.” said Mr. Jesani. “Especially when they know how considerably less they could be spending monthly, both immediately and in the future.”
