My slow awakening may save you piles of money.

In 1974, I went to work for a major insurance company. They offered the usual benefits package – health, dental, and life insurance. They gave me one time my salary for free, and I could buy up to four times additional life insurance at an extra cost. Like many of you, I just needed to sign my name and was insured. I thought it was odd that no health questions were asked, but I never question a good deal.

Or so I thought…

About 10 years later, individual term policies moved into the mainstream and became more available and competitive.  I realized I was paying much too much for my employer-sponsored life coverage. After investigating this, I discovered an insurance term called “pooling.” I mentioned above that I was not asked any health questions to get my group coverage. What my company was doing (and yours is today) was “pooling” me with the rest of the people in my company. This means they rated me “average” with everyone else and offered a blended rate to everyone in their corresponding age bracket.

I realized by doing this, the company was assuming average health for everyone – some sick, some fair, some good, some in excellent health. In other words, with being in good or excellent health, I got to subsidize the sick ones in the group. It didn’t take long to figure out that I could drop out of the group and buy an individual policy with a long-term rate guarantee for significantly less money than I was spending.

Here’s my second realization…

What You’re Paying Now.

If you have group life insurance through your place of employment at no cost, be thankful.

We’ve had many clients drop out of the group life plan, purchase an individual policy with a 20-year or 30-year rate guarantee, or even a 40-year rate guarantee, and save money. The key is that you must be in good health to make this work. If you’re sick, you may have a better value in the “pool” as others pay extra for your coverage. If you contact the Human Resources area where you work, ask the following questions.

In this example, I’ll assume you are 43 years old. Ask them, “Do my rates change as I get older?” – they will probably say the next change is at age 45, then 50, then 55, and so on. Then ask, “Based on today’s rates, what would my rate be if I were 45, 50, 55, and 60 today for the same coverage?”

Compare those numbers against a longer-term fully guaranteed contract on our  Instant Quote page. You may be surprised that you possibly can get a guaranteed-rate policy for less than you currently pay for your non-guaranteed (and increasing) group rate.

It’s also important to remember that group insurance isn’t portable. If your employment ends, your group life insurance will too. If your health has changed in the interim, it creates a problem if your next employer doesn’t offer coverage. An individually owned policy is portable and isn’t dependent on your next employer. In today’s transient business climate, who controls your insurance coverage is an important consideration.

If you would like to evaluate your health and see where you might fit, visit our Underwriting Guidelines page. 

Questions? Comments? Suggestions? 1-800-542-5530