Life insurance is important, but many people don’t even think much about the topic until after age 50. As you enter your golden years, your financial planning shifts into a different gear. There are many options available from seniors, including group life insurance that is offered through employers, veterans benefits, or other clubs and organization.
How Does Group Life Insurance Work?
Group life insurance provides a way to insure a group of individuals, or members, under one insurance policy. It is an excellent way to get affordable coverage for older people, without a medical examination. The most well-known group life insurance coverage for seniors is the AARP life insurance program.
Group Insurance vs. Individual Senior Life Insurance
While group policies like the one offered by AARP are often a good deal for seniors looking for simple and quick coverage, it is important to compare the rate to an individual policy. If you are a healthy senior, then it may be cheaper to get an individual policy and you might be able to lock in the rate for longer than the group policy. This is because with group coverage, everyone is pretty much lumped into one category regardless of specific factors.
There is no medical exam, so things like your individual health history, your weight, etc. are not evaluated on an individual basis. Because of this, seniors who are in good health end up paying more than they would if they bought their own separate policy, and seniors who have health challenges pay less than they would if they ventured out and purchased a separate policy.
Is Group Life Insurance Best for Me?
There are different ways you can approach your life insurance coverage. Some have an individual policy and choose to go through the full underwriting process, which includes a medical exam. Some will have an individual policy and a group policy, such as the AARP life insurance program, as a supplement. Others choose to just get a group policy. It all depends on your needs, your budget, as well as your health. I talked about the difference in cost between a fully underwritten policy and the group policy – if your health is great then you may be better off getting an individual policy and locking in a lower rate for a longer time.