Jan. 31, 2007

What's the difference between group universal life and individual life insurance? Which one is better?

Mark, Minnesota

Dear Mark,

Group life insurance, often offered by employers either as a benefit or on a voluntary basis, can be an affordable way to buy life insurance, but most experts recommend using group life insurance to supplement, not replace, individual life insurance. This is because most group life policies, whether you pay for them or not, don't offer enough coverage for your beneficiaries. The one or two years' worth of salary would not be enough for most young families if the key breadwinner died.

While often more expensive than group insurance, individual life insurance offers many more options and the opportunity to purchase enough to meet your dependents' needs.

For more on the differences between group and individual life insurance, read Group life insurance is a bargain, but don't view it as your main protection.

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