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Pros and Cons of Group Life Insurance

Is your employer-provided life insurance policy enough?

By McKenzy Bowers | July 30, 2017

If you have life insurance through your job, great. But your group life insurance plan might not provide all you coverage you need. To find out more, read on.

[Editor’s Note: This blog was originally published on December 24, 2009. The content has been updated.]

Employer-provided group life insurance may be an easy and inexpensive way to get protection for your loved ones…but if you lose your job? If that happens, you may lose your life insurance benefits.  And unless you have an individual term life insurance policy in addition to your group coverage, you risk leaving your family without any protection at all.  However, group life insurance does offer some benefits. Let’s take a look at the pros and cons of employer-provided group life insurance coverage:


  • People with severe health conditions can get coverage.  The idea behind group coverage is to spread the risk of claims over a large group of people.  Everybody under the policy pays the same premiums…even those who are severely ill, because no medical exam is required.
  • Age doesn’t matter.  The price of an individual term life insurance policy increases as you age, but no matter how old you are as an employee, you can get group life insurance coverage at the same price as everyone else, even those who are several years younger than you.
  • It’s inexpensive, convenient and sometimes free.  Most group life insurance policies are affordable and easy to sign-up for because there’s no extra legwork.  And some employers even offer a free, low-death benefit amount policy.


  • Choice of plan and carrier is made by the employer.  Your options are typically very limited when it comes to group life insurance coverage, so it’s important to make sure you’re fully aware of your life insurance needs before making the decision to opt for group life insurance.
  • Costly if you’re young and healthy.  Although group life insurance is usually affordable, you’ll probably pay more than you would with a cheap term life insurance policy if you’re young and healthy.  Why?  Because with group life insurance, the mortality risk is spread over a large group of people, without considering your individual health and lifestyle factors.
  • Coverage ends when you leave your job.  Nothing is certain.  In the unfortunate event that you lose your job due to bad economic times or have to leave due to a serious illness or disability, you’ll most likely have a very hard time finding new life insurance coverage.  Therefore, if you’re young, relatively healthy, and are looking for coverage for a guaranteed amount of time, an individual term life insurance policy is probably a better option.

But the most important thing to remember is…having some life insurance protection is better than having no coverage at all. For a free term life insurance quote, contact a licensed life insurance agent at AccuQuote.  In a matter of minutes, they can help you find the cheapest term life insurance that fits in your family’s financial plan.

For more information on life insurance, talk to AccuQuote. We can provide quality, competitive life insurance quotes from the top-rated, brand-name insurance companies you know and trust.

We only work with highly rated insurance companies – brand names you trust. You may be able to save money without sacrificing quality and strength.