Should I Buy Group Term Life Insurance?
Benefits of purchasing group life coverage:
- Minimal or no underwriting (good choice for the elderly)
- Usually Cheap
- May offer coverage in $1,000 increments
- Good way to get some quick coverage
- No medical questions
- No taxation of the death benefit
- May include riders or options
- Payable directly to your named beneficiary
Drawbacks of group plans:
- May only offer a flat amount
- Can be limited to several times your salary
- You may not be able to keep your coverage if you leave the company
- You may have to answer medical questions to buy additional amounts
- Cost is based on your age
- There is potential that an employer may see your personal health info
- The IRS claims policy cost in excess of $50,000 may be taxable to employees
- You are stuck with the agent that sold the company the plan
- May only allow you one beneficary
- May restrict you to term insurance or accidental death coverage
- You may have to depend on your employer to file the life insurance claim
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