Individual Life Insurance
What Does Individual Life Insurance Mean?
Individual life insurance is a policy purchased by an individual to cover themselves alone. It differs from group life insurance, which provides coverage to employees of a company or members of an organization.
This type of insurance is designed to meet the financial needs of a surviving spouse or family members in the event of the policyholder’s death.
Insuranceopedia Explains Individual Life Insurance
Individual life insurance is generally more expensive than group life insurance. Since the risk is focused on a single person, the policyholder cannot benefit from the cost savings that come with distributing risk across a group.
However, individual life insurance offers greater flexibility in coverage, allowing the policyholder to select the amount and type of coverage they prefer. In contrast, with group life insurance, the insured must accept the coverage provided by the group plan. Nevertheless, those covered by a group policy can often expand their coverage by paying additional premiums.
Individual life insurance includes a death benefit for a named beneficiary. This benefit is intended to ease the burden on survivors by helping them cope with the financial impact of the insured’s death.
Two popular types of individual life insurance policies are term life insurance and whole life insurance.
