Function

• The function of group life insurance is that the employer provides coverage for you. This type of life insurance is generally term life insurance but it may also be universal or even whole life insurance. The purpose of the insurance is to provide life insurance while you are working.
  
  

Identification

• Whether you need private life insurance in addition to group insurance depends on a few factors. First, can you take your employer coverage with you should you leave that company? Some employers allow you to convert your group coverage to a private policy. Second, do you have a long-term need for life insurance? For example, if you anticipate dying of old age, then you will need a burial policy. These burial policies are generally purchased as private, permanent, life insurance policies.
  
  

Benefits

• The benefit of maintaining a private life insurance policy in addition to group life insurance is that you can take your policy with you when you leave your job. Normally, when you leave your job, whether you quit, are fired or you retire, your life insurance policy doesn't come with you. Even if you are able to convert the policy from group to private, you aren't always able to convert the full amount. Instead, you may receive a reduced, paid-up life insurance policy. With a private policy, you won't experience a reduction in benefits unless you stop paying your premiums. Additionally, you can buy as much life insurance as you want through a private policy. Many employers limit the amount of coverage you can purchase through a group policy.
  
  

Disadvantage

• The key disadvantage to a private policy is the cost. Private life insurance is more expensive than group life insurance. This is because the size inherent in a group life insurance plan reduces the overall costs for all members in the group. The insurer is willing to give a discount to the employer of a large organization, an advantage you won't have with a private policy.
  
  

Considerations

• Consider what you need your life insurance policy for. Private life insurance lets you own the policy, meaning that it covers you for as long as you make the payments. However, if you don't think you'll need life insurance when you leave your job, such as if you have no dependents or your chances of imminent death are slim, the private insurance policy becomes an additional and unnecessary cost.