What is the difference between voluntary group life insurance and individual term life insurance?
Voluntary group life insurance typically has rates based upon the employer’s or association’s risk classification (SIC Code), not the individual’s health, lifestyle or family history. Additionally, the rate is influenced by the expectation that participation in the plan will be greater among the less healthy portions of the workforce than among the healthier segment because coverage is guaranteed, usually up to a maximum. Everyone within a five year age bracket is charged the same rate per thousand dollars of coverage. Rates do not vary based on policy size. Individual term life is different in that the rate charged each policyholder differs based on health and other factors unique to that policyholder. As a result, most applicants find that individual term life is less expensive — sometimes significantly so — although coverage is not assured. And rates are guaranteed for 10, 15, 20 or even 30 years, depending on the length of coverage desired by the applicant. Anyone seeking coverage
