Group vs Individual Life Insurance
Group vs Individual Life Insurance
Most people first encounter life insurance at work—simple, low-cost coverage you can enroll in during open enrollment. But should you rely only on group coverage, or own a personal policy too? This guide compares group vs individual life insurance so you can pick the right mix. If you’re still sizing coverage by timeline, our life insurance laddering guide shows how to match amounts and terms to real-world needs.
Instant Quotes: Compare Your Personal Policy Options
Run instant quotes for multiple term lengths, then stack them against your workplace plan to see the long-term value.
Quick Definitions
- Group life insurance: Employer/association coverage. Often inexpensive for a base amount and easy to enroll, with little to no medical underwriting up to a limit.
- Individual life insurance: A policy you own and control. You pick the amount, term, riders, and carrier—and it stays with you if you change jobs.
Choosing amounts with kids at home? Use this quick checklist in our guide to life insurance for parents with young children to make sure coverage actually matches today’s bills and tomorrow’s college costs.
Cost and Value Over Time
Group life can be a bargain today, but premiums often rise by age band and coverage may cap out. An individual level-term policy locks a premium for 10, 20, or 30 years—often a better value for long horizons if your health is average or better.
Need a near-term bridge or simplified option? See life insurance alternative options for fast-issue paths you can pair with term coverage.
Underwriting and Eligibility
Group: Minimal underwriting up to a guaranteed issue amount—helpful if you’re between doctors or have a medical condition. “Buy-up” amounts may still require health questions.
Individual: Underwriting can be streamlined or exam-free at certain amounts/ages. If you’ve got health complications, we can still place coverage—see how we handle real cases in life insurance for diabetics with complications.
Portability and Job Changes
Group coverage usually ends when employment ends. Some plans allow portability or conversion, but the cost can be steep at older ages. A personal policy is portable by design—it follows you, not your employer.
If career moves are likely or you have unique planning needs, review our approach in life insurance for autistic people to see how we preserve continuity through life transitions.
Conversion Options (Term → Permanent)
Some group plans allow conversion to a permanent policy, but choices and pricing can be limited. With individual term, you can choose a carrier up front with strong conversion privileges (often a long window, no new medical exam) into permanent options like GUL or whole life.
Getting beneficiary language right matters on both types of policies—if you’re unsure, read our guide on per stirpes vs per capita beneficiaries to avoid accidental disinheritance.
When to Own Both Group and Individual
- Take the free/cheap group base: If your employer covers a base amount at little or no cost, keep it.
- Lock long-term protection with individual term: Add a 20–30 year level term sized to your big timelines (mortgage, childcare, college).
- Use voluntary group buy-up selectively: Only if pricing is strong—and you already own an individual baseline you control.
Talk Through Your Mix of Group and Individual
We’ll price options, review your employer booklet, and design a plan that holds up if you change jobs, move states, or your health shifts.
Get Your Coverage Right
We’ll compare your group plan to top individual carriers, check conversion options, and set the right beneficiary structure for your family.
Action Steps: Pick the Right Mix
- Max the employer base coverage if it’s free or inexpensive.
- Run individual quotes for 20–30-year term using the calculator above.
- Choose at least one policy with a strong conversion rider.
- Set clear beneficiary language (review annually and after life events).
FAQs: Group vs Individual Life Insurance
Is group life insurance enough by itself?
Usually not. Group amounts are often 1–2x salary—rarely sufficient for mortgages, childcare, and college. Use group as a base and own individual term for the long horizon.
What happens to group coverage when I leave my job?
It typically ends. Some plans allow portability/conversion, but pricing can be high. A personal policy avoids gaps during job changes.
Do I need a medical exam for a personal policy?
Not always. Many carriers offer accelerated or exam-free underwriting within certain limits. We’ll match the path to your profile.
Can I keep both group and individual coverage?
Yes—and for many households, that’s ideal. Take the inexpensive group base and own a personal policy you control long-term.
How do I set beneficiaries correctly?
List full legal names, consider percentages, and decide on per stirpes vs per capita for your situation.
