Here are some reasons that suggest that you still need an individual policy even when you have employee life insurance-
1. Inadequate CoverageGo through the terms and conditions of such group policies, and you will see that the assured sum is way below than what your family might need in case of your demise. In most cases, the coverage is not more than 4-5 times of your salary..
With an individual policy, you will get a significantly larger coverage which can be used by your loved ones for a considerable duration.
2. Doesn’t Suit Your Insurance NeedsWhen your employer is selecting the insurance, you will not quite have much of a say in the process. As a result, the policy can miss a lot of essential features or benefits.
For instance, if you ride or drive to work daily, it is essential for your life insurance to have accidental death and surgical/hospital care benefit. You can get these features as add-ons when you purchase an individual insurance policy.
3. No Coverage If You Leave the JobIn most of the cases, you will not be allowed to take your group insurance with you when you leave the current job.
While some group policies do have the feature where you can convert it to an individual policy, the premium will mostly be higher than what you might pay for a new individual policy with more extensive coverage.
4. Premiums Get Expensive with TimeIf you are covered by a group policy by your employer for tenure, you might be thinking that you will purchase an individual policy after this policy comes to an end. However, this can prove to be very expensive.
The premium of policies increases with time. This is the reason why it is better to buy one in your 20s or 30s rather than relying on group policy and delaying the purchase to your 40s and 50s.
Individual Insurance Policy for Maximum Coverage and BenefitsIt is great that your employer offers group insurance. But for effectively securing your family, it is an individual policy that you will need. Understand these reasons thoroughly, and you will see why an individual policy is a must even along with employee insurance.
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The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
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