Today, more and more women are becoming the head of the families and are at the helm of financial activities. And, when it comes to securing the family’s financial future, you cannot overlook the significance of a term insurance policy.
As a salaried woman, your employee may offer you term insurance cover under the group policy as part of their employee retention and benefits program. Group term insurance covers all the employees in a company under a single policy, wherein the sum assured is equally distributed amongst all employees covered under the plan.
However, you must ask yourself, is the group coverage enough for you? In most cases, the group term insurance policy offers limited coverage and benefits. Hence, insurance experts recommend all women purchase an individual term plan even though they have group insurance cover.
If you are not convinced about the importance of buying an individual term plan, knowing the difference between the two will help you make the right decision.
Premium
Generally, the term insurance premium is lower than other types of life insurance products. And, with group term insurance, since the premium is equally distributed among all employees, the premium amount is quite affordable. Also, you need not worry about paying the premium; the amount will be automatically deducted from your salary.
On the other hand, the premium for individual term plans may be slightly higher than group insurance. However, it is still much lower than other life insurance plans. You can get a term cover for a lower premium, especially if you buy the policy at a young age.
Coverage amount
The coverage amount under a group term insurance is limited as determined by your employee. In most cases, the amount may not be enough to help your family meet their future needs.
In contrast, when you buy individual term insurance, you have the flexibility to choose the coverage amount based on your family’s specific needs. You can buy a term plan with a sum assured up to ₹1 crore or more. This should give your family enough financial cushion to take care of their everyday expenses even in your absence.
Policy continuity
The group term plan remains active until you stay employed with the specific organization that offers you the coverage. When you quit the company, you would lose the policy benefits. Some organizations allow policy portability. However, there may be several restrictions on it, and you may have to pay a higher premium for porting the policy to a new insurer.
With individual term insurance, you need not worry about such hassles. The policy would continue to remain active for the entire policy period, provided you pay the premium on time.
Cancellation
Your employer or the issuing insurance company can cancel a group insurance plan. Thus, there is higher uncertainty of coverage under a group insurance policy.
When you buy an individual term plan, there is minimal risk of cancellation. You have complete control over it. You can only lose the coverage and the policy benefit if you don’t pay the premium.
Final Word
Thus, it is evident that individual term insurance has several benefits over group insurance. So, even if your employer offers you a term insurance cover, ensure that you purchase a term plan of your own to give your family additional financial protection.
