Group Life Insurance vs. Individual Life Insurance
But how do you even know if you have a group policy? What’s the difference between group life insurance and a regular policy?
Individual policies cover a single person, while group life insurance covers a group of people, typically people who work for the same employer. If you didn’t get your coverage through work, you have an individual policy. For example, if you bought it from a local agent or an online broker (that’s us!), you have an individual life policy.
Individual policies are priced based on personal details including your age, your health, your lifestyle, and your family history. They can be designed to provide a specific amount of coverage for a certain period of time, or to provide lifelong coverage. Coverage comes in a wide range of amounts, from a few thousand dollars to multi-million dollar polices. And although you got to this page by asking, “Is group life insurance taxable?”, we can tell you that individual policies are virtually never taxable.
Group life insurance policies, on the other hand, provide a small, set amount of coverage for all members of the group. That group might be all the employees of a particular company or workers’ union. The terms of the policy are usually determined by the employer. For example, your employer may choose a standard coverage amount – $25,000 or $50,000 – to offer to anyone who works for the company.
Summary: If you got it through work, it’s a group policy; if you bought it from an agent or online, it’s an individual policy.