Group Insurance? Why do you want to pay more?

Most people are under the impression that insurance, like commodities, get cheaper when purchased in bulk – that is through a group.  This couldn’t be further from the truth.  My wife was recently offered the ability to purchase a Group Universal Life contract through her Fortune 500 employer.  So, I thought it would be a good exercise to check it out.  The bottom line is that I could get a plan that would guarantee her premium until she was 100 years old 20% cheaper than what Met Life could offer through the group with an equally well-rated insurance company.  And, the group plan did not offer a guaranteed premium.

Quoting from their brochure…”Is there an advantage to buying group life insurance?”  The reasons given include convenient payroll deduction and not having to provide proof of good health.  That’s like the Ed McMahon commercial -- “no health questions will be asked.”  Ed, please ask me questions because I don’t want to pay TWICE AS MUCH as I could if you asked!!!  Isn’t marketing great – turn the disadvantage into your marketing pitch.

When you’re offered a plan (Life Insurance, Health Insurance, Car Insurance, Long-Term Care, etc..) through your employer (or any other group situation) don’t assume that it’s better for you.  It may be, but if you’re healthy it’s probably not.  Also for you self-employed folks out there, don’t be swayed by an organization that claims to be your advocate.  It's a wolf in sheep's clothing.