Group vs Individual Term

Most people believe that group life insurance is cheaper than private term insurance.  And yes that can be the case, however at times it is more cost effective to get life insurance based on your own personal health.  Group life insurance is not generally individually underwritten, rather it is underwritten based on a large population.  Meaning, those in better than average health can pay a higher premium than they would if they purchased their own insurance.  In the Insurance industry this is called "adverse selection."

Factors in Life Insurance premiums

There are several factors that influence life insurance premiums.  Some factors we can influence or change and some we can’t.  Age, obviously, affects the rates the most.  Men typically pay more for life insurance, as their life expectancy is lower.  In addition height, weight and medical history can change how much life insurance costs.

Why the difference?

Up until age 45, FEGLI (Federal Employee Group Life Insurance) is subsidized by the government.  But once you reach 45 you pay the cost and it is a banded cost, meaning as you age up every 5 years your rates increase.  Term insurance is based on your health and the rates typically don’t change for the term. You can get 10, 15, 20 even 30 year term insurance to meet your family's needs.   Call today to learn more.

Contact Keith Tucker CFP at (571)441-1939 to find out if you can save!