One of the many factors we look for in finding a job is locating an employer with an excellent benefits package. Often, going out on our own to look for insurance can be costly, so going with group plans is generally a great idea. That is, except for life insurance.
Buying into a group plan with your company is a great money saving opportunity for you and your family, but that is not the case with life insurance. In fact, you are much more likely to have a cheaper life insurance plan by going with a third-party company.
For individual life insurance policies, premiums have been declining over the past two years, whereas group plans have stayed the same price for nearly ten years. If you want to save money, it is a good idea to go with an outside company. You could be paying half the price just by going with an outside company.
Involvement in your company’s group plan can also put you at a disadvantage.As you and your coworkers get older, the cost and requirements of renewing the group plan may change. That means the price could potentially go up and cost you a lot more than if you were paying for an individual plan, in which group rates do not apply and the cost will not change over time of coverage.
In addition, the group plan applies to a variety of people within the workplace, with varying ages and levels of health. To determine the premium, all these factors are averaged. If you are younger and of relatively good health you may end up paying way too much.
One major way to save yourself money on life insurance is to determine whether or not you actually need it. Sometimes people waste their money on life insurance without even considering if it is going to be of any benefit to them in the future. For those of us who don’t have any dependents, or have dependents who are grown up and are financially stable, we most likely don’t need life insurance. If covering your funeral costs and leftover debt is a major concern for you, it may be a better idea to open up a long-term savings account that can accumulate to cover those expenses.
If you do decide you need a life insurance plan, get the rates from your employer and compare them to the rates of different companies. That way you can make the most informed and money-saving decision that works best for your needs.