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What group life insurance actually gives you
Most employer group policies provide one to two times your annual salary in coverage, often with the first $50,000 free. There is no medical exam, enrollment takes minutes during onboarding, and the price is low because the risk is spread across the whole employee pool. For someone with health issues that would make individual coverage expensive or impossible to get, group coverage can be the only affordable option.
The limitations are structural. The coverage is tied to your job: leave, get laid off, or retire, and it usually ends. Some policies offer a conversion option to an individual policy without new underwriting, but conversion premiums are high and the option is not universal. You also get no customization: no choice of term length, no meaningful rider selection, and limited beneficiary control compared with a policy you own.
What an individual policy gives you
An individual policy belongs to you. It stays in force through job changes, layoffs, and retirement. You choose the coverage amount, the term length, the policy type (term, whole, universal), and the riders. Coverage limits are far higher: individual term policies routinely go to $1 million and beyond, while group plans cap out at a multiple of salary.
The price of that control is underwriting. Individual policies usually require health questions and often a medical exam, and applicants with health conditions pay more or face declines. Premiums are generally higher than group rates for the same face amount, though for young healthy buyers individual term is still remarkably cheap.
The math that decides it
Run the DIME calculation on your household, then compare it with your group coverage. A 40-year-old earning $100,000 with a mortgage and two kids might need $1.2 million; a 2x salary group policy provides $200,000, leaving a $1 million gap. That gap is what the individual policy fills. Financial planners consistently recommend treating group coverage as a supplement, not the plan: take the free employer coverage, then buy an individual term policy sized to the real need.
One more consideration: group premiums rise with age in five-year bands and can get expensive in your 50s, while an individual term policy locks your rate for the full term. If you are weighing what happens to coverage when employment ends, read our guide to portable life insurance when leaving a job. And if your group policy has a conversion feature, our explainer on converting term to permanent coverage covers the deadlines before you rely on it.
