Having group life insurance through your job or organization is certainly one of the top excuses for not buying a personal life insurance policy. After all, if you already have it, why buy more. No physical. No muss or fuss, and group insurance is generally sooo cheap.

Well, allow me to throw the cold water of reality on that idea. Changing jobs is statistically happening more frequently, and losing jobs is coming by the dump truck full these days. It’s not like our parent’s day when you got a job and worked it from then until you retired or died. I think I read somewhere that the average working person who has a job that would be eligible for group benefits changes employment 7 times over their working lifespan. In this recession we would just hope that there’s another job to go to.

Two things can happen to your group life insurance when you change jobs. Most group life insurance policies, which are term insurance, are convertible to either whole life or universal life policies if you leave employment. Very few of these conversion options would fall into the category of what would be called an attractive offer. Generally they are overpriced and under guaranteed, a bad deal by any reasonable parameters. So your choice becomes either accepting a bad deal, quickly finding another job with a comparable group life plan (not happening), or buying a personal policy.

The other thing that can happen with group coverage if you leave employment is that it simply ceases. Most are kind enough to give you 30 days, a grace period of sorts, but then it simply goes away.

Especially in today’s market when an independent life insurance agent can find you term life insurance at extremely competitive prices, a prudent and reasonable thing to do is to carry a personal policy all of the time and consider group benefits to be the frosting on the cake, not the cake itself. Then, if you change employment, or if the roof caves in, you have ongoing coverage. Your family is never put in a position of being left with nothing if you pass away unexpectedly.

Bottom line. Term insurance prices, at least for the moment, are at all time lows. Buy a policy that won’t change if your employment picture does and take whatever they might offer at work for free. Generally that will be 2-3 times your annual income.