Life Insurance
Group life allows employees to name
the beneficiary of their choice. Nothing new there. But group coverage
has no
suicide clause, and the employees have a special conversion privilege
upon
departure from the group. The conversion privilege grants the right to
the
employee to convert the amount of their group coverage into an
individual life
insurance policy without any evidence of insurability. This can be an
extremely
valuable benefit, particularly if the employee has become uninsurable.
Life insurance
in small amounts may also be offered to the spouse and dependent
children of
the group plan members.
|
|
Term
Life Insurance |
Permanent
Life Insurance |
|
Coverage |
Specific period of time, or “term” |
As long as you live |
|
Best suited for |
Short-range goals |
Long-range goals |
|
Financially, best for |
Those with a more limited budget |
Those with more financial means |
|
Premium |
Lower cost, but increases when policy is renewed |
Higher cost, but stays the same for entire policy |
|
Money available to borrow? |
No, doesn’t earn any cash value |
Yes, cash value can be borrowed against tax free; will
decrease the death benefit |
|
Death benefit |
Death benefit provided for the specified time period |
Death benefit provided for as long as you live |
|
Cash Value |
Does not accumulate cash value |
Accumulates cash values, on a tax-deferred basis |