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Individual Life Insurance Vs Group Life Insurance

Feb 13, 2020 | 5 months ago | Read Time: 3 minutes | By iKnowledge Team
ndividual Life Insurance vs Group Life Insurance

2019 turned out to be a favorable year for life insurance companies in India. Data from the Insurance Regulatory and Development Authority of India(IRDAI) reveals that a 41% growth in the annual premium of individual life insurance (single premium policies plus first-year premiums) was registered in November 2019 as opposed to the same time the previous year.

A life insurance policy is generally considered to be an essential part of long-term financial planning. A life insurance policy is not only a means of protecting your family from uncertainties that may lead to financial insecurity in the future, it also offers maturity benefits that can function as a savings component. 

There are two broad types of insurance plans one can avail

  • individual life insurance policies

OR

  •  group life insurance policies. 

The employer, themselves, is the policyholder in a group life insurance policy. A group insurance policy provides insurance to all the employees in the company under a single plan. All the formalities during the purchase of life insurance are completed by the employer.

While individual life insurance, as the name suggests, covers only you (and in some cases, your spouse). The duration of the plan would generally depend on the type of policy that you opt for; it could be till the end of your working life or extend to your post-retirement years. Both, individual insurance plans as well as employee-sponsored plans, come with their own set of merits and demerits.

Let us see how both plans fare on different parameters and determine which of these have the upper hand:

  1. Pricing: Group life insurance plans cover a larger number of people and offer similar benefits as per the terms and conditions decided by the employer. Typically, group insurance policies are lighter on the pocket. A small amount deducted from your salary may be used towards the policy. On the other hand, a life insurance policy bought by you may cost more, but is tailored as per your needs and may have additional benefits. The earlier you opt for an individual insurance policy, the lower the premium you’d have to pay.
  2. Flexibility: Individual life insurance gives you the freedom to choose how much protection you require as per your financial, personal and health needs and pay the premium accordingly. The terms and conditions of a life insurance policy bought for a group of employees are standardized and may not suit everyone’s needs.
  3. No claim bonus: A group life insurance policy does not offer any benefit for a claim-free year. When you do not make any claim during the duration of life insurance policy purchased by you, you become eligible for renewal and enhanced coverage at discounted premiums. Employee sponsored plans do not offer such benefits.
  4. Applicability: Individual life insurance, once purchased, is applicable always. With individual insurance, you are guaranteed coverage for as long as you pay your premiums. However, with employer-sponsored plans, the continuation of the plan is dependent upon your employer, since the policy is issued in their name and the premiums are paid for by them. If one’s employer faces a capital crunch, they may no longer be able to provide benefits such as a life insurance policy. Moreover, if they end up laying off employees or the employee themselves wants to switch jobs, this could lead to the loss of their life insurance policy.

It is advisable to purchase an insurance plan that is in tune with your personal requirements, rather than a one-size-fits-all policy. Taking an individual life insurance policy later in life can prove costly for the employee. So even if your employer provides life insurance, it is prudent to opt for a policy for yourself.

The iTerm Plan from Aegon Life is an individual life insurance plan that provides protection to policyholders till 100 years of age at an affordable premium. You can also opt for the iTerm Plus for additional coverage against critical illness, disability, accidental death and terminal illness, among others. With the help of an individual insurance plan from Aegon Life, you can secure the future of your family and choose the right life insurance plan, as per your unique goals and needs. You can rest assured that the future of your family stays secure, even in your absence. To know more about Aegon Life Insurance’s products like term insurance or any other products, visit our homepage.


PRODUCTS

iTerm Plan

Life Insurance Plan with 3 Options to Choose from

  • Life Protect (Life cover till age 100 years)
  • Protect Plus (5% Automatic Increase of life cover)
  • Dual Protect (Protection + Regular Income)
iTerm Plus Plan

Life Insurance Plan with 4 Options to Choose from

  • Life Plan
  • Life Plus Plan
  • Life & Health Plan (10 Critical Illnesses covered)
  • Life & Health Plus Plan (36 Critical Illnesses covered)
iInvest Plan

iInvest Plan with 3 Options to Choose from

  • Increases Your Investment
  • Boost Your Fund Value
  • Withdraw Your Investment
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