What Is Individual Life Insurance?
Individual life insurance is a policy that is designed to cater to the financial needs of a surviving spouse or family members in the event of the policyholder’s death. This type of insurance is different from group life insurance, which covers employees of a company or members of an organization. Here is a table comparing the two types of insurance:
| Individual Life Insurance | Group Life Insurance |
|---|---|
| Policy is paid by one person and covers a single person | Covers employees of a company or members of an organization |
| More expensive since the risk is concentrated in a single person | Less expensive since the risk is distributed among a group |
| Offers more flexibility in terms of coverage | Insured has to settle with the coverage that is offered |
| Has a death benefit for the named beneficiary | Has a death benefit for the named beneficiary |
Individual life insurance policies offer more flexibility in terms of coverage options. Policyholders have the freedom to choose the coverage that they want, while those insured by a group policy have to settle with the coverage that is offered. However, group life insurance policies offer a chance for individuals to expand coverage by paying additional premiums.
Two of the most popular individual life insurance policies are term life insurance and whole life insurance. Term life insurance provides coverage for a specific period at a fixed rate, while whole life insurance provides coverage for the entire life of the policyholder and has an investment component.
Overall, individual life insurance is designed to offer peace of mind to policyholders and their loved ones, ensuring that they are protected in the event of an untimely death.
